Capital Structure of Non-life Insurance Firms in Japan | Zendy

Mahito Okura | Zendy; Satoru Yamaguchi | Zendy

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Capital Structure of Non-life Insurance Firms in Japan

Author(s) -

Mahito Okura,

Satoru Yamaguchi

Publication year - 2016

Publication title -

applied economics and finance

Language(s) - English

Resource type - Journals

eISSN - 2332-7308

pISSN - 2332-7294

DOI - 10.11114/aef.v3i3.1508

Subject(s) - solvency ratio , debt to equity ratio , life insurance , equity ratio , solvency , profitability index , economics , index (typography) , expense ratio , debt to capital ratio , capital adequacy ratio , actuarial science , econometrics , return on equity , business , monetary economics , finance , microeconomics , profit (economics) , demography , market liquidity , population , closed end fund , sociology , world wide web , computer science , nonprobability sampling

This research investigates the debt to equity ratio (D/E ratio) in non-life insurance firms in Japan through empirical analysis and offers several main findings. First, the solvency margin ratio has a negative effect on the D/E ratio. Second, neither the Return on Equity (ROE) nor the combined ratio has an impact on the D/E ratio. Third, the expense ratio has a positive effect on the D/E ratio, while the loss ratio does not. The second and third results imply that the expense ratio is the most suitable index for measuring profitability in Japani¯s non-life insurance firms when the D/E ratio is being considered.

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