Financial Distress Analysis of Registered Insurance Companies in Indonesia Stock Exchange 2015-2019

Abstract

This study aims to analyze the insurance financial ratio such as underwriting ratio, loss ratio, investment yield ratio, liability to liquid asset ratio, net premium growth ratio, technical reserve ratio and risk based capital to potential financial distress. The population in this study were all insurance subsector companies listed on the Indonesia Stock Exchange for the period 2015 to 2019. The sampling technique used was the purposive sampling method so that a research sample of 10 companies was obtained. The data analysis technique used logistic regression analysis method. The results showed that the underwriting ratio, net premium growth ratio, and risk based capital had a significant and negative effect on the potential for financial distress. Loss ratio, liability to liquid asset ratio, and technical reserve ratio have a significant and positive effect on the potential for financial distress while the investment yield ratio has no significant effect in predicting the potential for financial distress.