The major objective of the study was to examine the determinants of profit in insurance companies represented by ROA for the period of 2013-2018 for 5 insurance companies in Nepal. Variables tested in this study are: age of the company, operating expense ratio, loss ratio and liquidity ratio. Data for five years was collected from five non-life insurance companies of Nepal viz. Himalayan General Insurance Co. Ltd., Lumbini General Insurance Co. Ltd., Shikhar Insurance Co. Ltd., Premier Insurance Co. Ltd. and Nepal Insurance Co. Ltd. The study is based onsecondary data obtained through different reliable sources, which were analyzed using the various financial tools. 
The specific objectives of the study were to study the internal factors that affect the profitability of non-life insurance companies in Nepal; and to study the relationship between profitability and age, operating expense ratio, loss ratio and liquidity in the period of FY 13/14 to 17/18.
Summary of Major Findings:
  • By the verification of the hypotheses, it was found that the ROA is positively affected by age of the company and operating expense ratio and negatively affected by loss ratio and liquidity ratio.
  • Also, in Table 4.5, for the model, the results show that VIF (variance inflation factor) for all variables is less than 4; this indicates that the model is free from multicollinearity. Hence it was determined that the data collected is valid for the analysis and does not require any changes.
  • The F- value and significance level of 10.467 and 0.000 respectively determined that the developed regression model fits for the study.
  • The correlation analysis shows that the dependent variable ROA has a negative relationship with independent factors age and loss ratio; while it has a positive relationship with operating expense ratio and liquidity ratio.
  • The corresponding p-values of the variables shows that, there is no significant relationship between ROA and the independent variables loss ratio and liquidity ratio while there is a significant relationship between ROA and the independent variables age and operating expense ratio. 
  • The regression analysis of ROA resulted in R- square value to be 67.70%. This determined that 67.70% of the total variation in ROA is due to the independent variables. 
  • The net profit of HGI, was increasing between the years 13/14 to 14/15 and 16/17 to 17/18. Between the years 14/15 to 16/17 the company faced a continued downfall of net profit. 
  • The net profit of LGI, has had a continued steady increase through the years 13/14 to 17/18.
  • The net profit of SIC, has had a continued steady increase trough the years 13/14 to 17/18.
  • PIC had a decrease in their net profit between the years 13/14 to 14/15 and 15/16 to 17/18. Between the year 14/15 to 15/16 the net profit increased by a huge scale.
  • NIC faced a huge loss between the year 13/14 to 14/15. Between the years 14/15 and 16/17, the company performed exceptionally and saw a huge rise in their net profit. During the year 16/17 and 17/18, the net profit increased only by a small scale.