Determinants of Profitability of the Insurance Industry: An Application of the TVP-DMA Model

Document Type : Research Paper

Authors

1 Ph.D. Department of Economics, Faculty of Economic and Administrative Sciences, University of Mazandaran, Iran.

2 Professor of Economics, Department of Economics, Faculty of Economics & Administrative Sciences, University of Mazandaran, Babolsar, Iran

3 Professor, Faculty of Economic and Administrative Sciences, University of Mazandaran, Iran. E-mail: jafarisa@umz.ac.ir

4 Associate Professor, Faculty of Economic and Administrative Sciences, University of Mazandaran, Iran. E-mail: m.motameni@umz.ac.ir

5 PhD in Economics, Ferdowsi University of Mashhad, Iran. E-mail: soheil.roudari@gmail.com.

10.22111/ijbds.2025.50158.2157

Abstract

Nowadays, insurance is considered as an integral part of the financial system of every country. Insurance companies as important financial institutions in the capital market, in addition to risk coverage, play the role of financial intermediaries. As for-profit institutions, these companies must achieve profitability by implementing these two roles. For this purpose, this study aims to identify the factors that determine the profitability of Iran's insurance industry between 2011-3 and 2022-3 on a seasonal basis using the TVP-DMA model. The results showed that financial leverage variables, exchange rate, and insurance premium growth are, respectively, the most influential variables affecting the performance of Iran's insurance industry. Additionally, the results show that the manner and probability of these variables influencing the performance of the insurance industry over time is not constant and is influenced by factors such as the JCPOA agreement, withdrawal from the JCPOA, the continuation of the privatization process, the elimination of value-added tax in the insurance industry, and the change in the articles of association insurance companies, notification of the establishment of the general natural disaster insurance fund and the use of the capital market capacities of the insurance industry.

Keywords

References

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International Journal of Business and Development Studies
Volume 17, Issue 1
March 2025
Pages 211-235

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