Browsing by Author "Sudasinghe, S. L."

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An Empirical Analysis of The Firm-Specific Internal Factors on the Profits of Insurance Companies in Sri Lanka
(Faculty of Commerce and Management Studies University of Kelaniya., 2024-11-11) Hansini, W.W.; Sudasinghe, S. L.; Fernando J.A.H.P.
The insurance sector plays an important role in the national economy, managing risks and providing financial security. The goal of every company is to achieve optimal profit. Profits are important to investors and management as sources of dividend payments and growth. For insurers and regulators, profits provide additional protection against insolvency. Therefore, companies must identify the factors that affect their profits. This study investigates the impact of premium income, claim expenses, risk-based capital, underwriting results, and investment return on the profit of life and general insurance companies in Sri Lanka. The study sample consists of all life and general insurance companies in Sri Lanka from 2016 to 2022. A quantitative approach is used for this study. Independent variables include premium income, claims expenses, risk-based capital, investment returns, and underwriting results. Profit is considered the dependent variable in the regression model. Descriptive analysis, correlation analysis, and panel data regression are used to analyze the data in this study. As a result, the profit margin of insurance businesses in Sri Lanka would be greatly impacted by premium income, claims expenses, risk-based capital, investment return, and underwriting performance. The regression results could not reject every null hypothesis for the life and general insurance industry. More specifically, neither model rejected the null hypothesis that claimed that profit is not much impacted by risk-based capital and investment return. The analysis showed that underwriting outcomes, claims costs and premium income significantly affect profit.
Impact of Capital Structure on Financial Performance of Life Insurance Companies Listed at the Colombo Stock Exchange (Cse) in Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Weerasinghe, U. G. H. A.; Sudasinghe, S. L.
Introduction: The optimal capital structure levels and capital structure decisions that impact how a firm performs have been a great dilemma for many. Capital structure decisions have an impact on the growth and profitability of a firm, as these decisions enable firms to maximize their shareholders' wealth. The major research objective was to determine to identify the impact of capital structure on the financial performance of life insurance companies listed at the CSE in Sri Lanka. Methodology: The data is obtained from CSE and IRCSL. The study only uses accounting data from listed life insurance companies between 2016 and 2022. The all the life insurance companies listed at the CSE taken as the sample for the analysis. The study used the capital structure as the independent variable and measured using the three most used capital structure indicators such as Total debt ratio (TDR), Debt to Equity Ratio (DER), Leverage (LEV). The dependent variable of this study was financial performance, and it was measured by using Return on Assets (ROA). In addition to the independent and dependent variables, Firm Size (FS) and growth rate (GR) used as the control variable of the research study. Findings: Total debt ratio was found to influence ROA of insurance firms negatively. Results can be further interpreted as increase in debt in the insurance firms would lead to a lower financial performance. The findings show debt to equity, firm size, and growth rate are all positively and significantly associated with financial performance, while total debt ratio and leverage are not significantly associated with financial performance. Conclusion: In view of this, it is recommended that life insurance firms that are capable of funding their operations through retained earnings do so and reduce their borrowings, as this will boost their overall performance.
The Impact of Demographic Factors on Investment Behavior of Employed People in Southern Province Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Thanushika, P. H. N.; Sudasinghe, S. L.
Introduction: Demographic characteristics encompass a wide range of variables, such as age, gender, socioeconomic status, education, and marital status, among others. These factors significantly influence individuals' decisions on saving, investing, and financial planning. Understanding the impact of Sri Lanka's diverse and changing demographic structure is essential for comprehending how these factors affect investment patterns in the country. Methodology: This study uses deductive approach and quantitative methods to analyze the data. The sample is selected through a different employment such as full time, part time, and freelancer in Southern Province The researcher also involved in a non-probabilistic sampling technique based on the researcher's convenience. The sample size of 384 is calculated based on the Morgan table. A structured questionnaire used to gather data on identifying the demographic factors affecting the investment behavior. Demographic variables such as age, gender, job position, educational level, income level and work experience used to analyze the investment behavior of employed people. Findings: Descriptive statistics, correlation analysis and regression analysis have been conducted to identify the impact of demographic factors on investment behavior. As the main finding of the study, it was examined that the job position, income level, education level and work experience are significantly impact on the investment behavior of employed people in the southern province in Sri Lanka. Conclusion: It is crucial for individuals to acknowledge the importance of these demographic determinants and their possible influence on investment behaviour. Individuals must evaluate their financial objectives, willingness to take risks, and investing preferences considering their employment role, income, education, and professional history. Also, Sri Lanka has the capacity to cultivate a prosperous investment climate by recognizing and resolving the impact of demographic variables on investment patterns.
The Impact of Demographic Factors on Investment Decisions: A Comparative Analysis of Private and Public Sector Employees in Western Province, Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka, 2024) Hapuarachchi, H. D. M. H. S.; Sudasinghe, S. L.
Introduction: Investment decision making is a critical step in the investment process. Investors must decide where they will invest their money, their investment objective, the maximum amount of risk they are willing to bear, and the frequency with which they will invest. However, fundamental factors, as well as demographic and psychological factors of investors, may influence investment decisions. This study aims to examine the impact of the demographic factors and investment decision making of both private and public sector employees separately. Methodology: This study uses deductive approach and quantitative methods to analyze the data. The population for the study is the selected state sector employees and private sector employees in Western province, Sri Lanka and data for the study were collected from 385 respondents. The convenience sampling, subsequent random and proportional sampling techniques were used. The demographic variables such as gender, age, marital status, educational level, income and investment preference were used to examine the impact on the investment decisions. The questionnaires serve as the primary data collection method, pre-tested for reliability and validity. Findings: In analyzing the impact of demographic factors on investment preferences, objectives, risk tolerance, and frequency, distinct patterns emerged for private and public sector employees in Sri Lanka. While both sectors showed correlations with age, marital status, monthly income, and education, the private sector uniquely emphasized the role of gender in investment decisions. Additionally, disparities in investment objectives, risk tolerance, and frequency were evident, emphasizing the need for sector-specific financial planning strategies to cater to the diverse profiles and preferences of employees in each sector. Conclusion: In conclusion, this research underscores the nuanced connection between demographic factors and financial choices in both private and public sectors. It emphasizes the need for customized financial strategies tailored to the unique needs of each workforce. The provided recommendations offer practical insights for financial institutions seeking to enhance their services, fostering stronger client relationships by acknowledging and responding to diverse demographic-influences.
Influence of Company-Specific Factors on Profitability in Life Insurance Companies in Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Wijesinghe, S. R. S.; Sudasinghe, S. L.
Introduction: The purpose of this study is to look into how company-specific factors influence the profitability of Sri Lankan life insurance businesses. It specifically looks at the influence of company-specific factors such as premium income, claim costs, underwriting results, and risk-based capital on profitability. The life insurance market in Sri Lanka confronts considerable hurdles in maintaining profitability, which is critical to the industry's stability and expansion. Methodology: This study uses a quantitative research design using empirical methods built under a positivist paradigm and a deductive methodology. The study uses panel data from ten life insurance companies from 2016 to 2022, using financial data derived from annual reports and IRCSL reports. The research employs a panel data regression model to determine the influence of the stated factors on profitability. Findings: The investigation, which is supported by descriptive statistics, demonstrates substantial correlations between profitability and company-specific factors. Profitability is positively influenced by premium income and risk-based capital, but claim costs have a negative influence. However, underwriting results have little influence on profitability. Conclusion: The research gives critical insights into the financial dynamics of the life insurance industry, highlighting significant factors influencing profitability. It provides stakeholders with direction on how to improve premium income strategies, optimize claims management, and strengthen risk-based capital management in order to improve financial performance and strategic decision-making.
The Determinants of Demand for Reinsurance in the Sri Lankan General Insurance Market - Special Reference to the Marine Sector
(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Edirisingha, M. S.; Sudasinghe, S. L.
Introduction: Reinsurance is an indispensable tool in the risk management framework of the insurance industry, enabling companies to transfer significant risks while ensuring financial stability. This research focuses on the determinants of reinsurance demand in the general insurance market of Sri Lanka, focusing on the marine insurance sector, which is very important but not widely researched in the local context. Methodology: This study collected data from 12 General Insurance Companies in Sri Lanka for a sample period of eight years, from 2015 to 2022. Using a quantitative approach, this study collected secondary data from the annual reports of the selected companies. This study primarily investigates how critical financial factors such as Return on Total Assets (ROA), the growth of Gross Written Premiums (GWP), underwriting risk, solvency margin, and financial leverage affect the demand for reinsurance. A series of fixed-effects panel regression models were used in this study to analyze the data. Findings: The results show that solvency margin, financial leverage, and underwriting risk have a positive and significant impact on the demand for reinsurance. On the other hand, the ROA and GWP growth did not show any significant association with the demand for reinsurance, which thus indicates that financial stability rather than profitability or growth motivates the reinsurance decisions mainly in the SL context. Conclusion: Firms with higher solvency margins use reinsurance to optimize risk retention and capital allocation. Similarly, the higher the leverage, the greater the demand for reinsurance as a strategy to mitigate risks associated with increased financial obligations.
The Determinants of the Demand for Fire Reinsurance in Sri Lankan General Insurance Market
(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Fernando, P. Y. I.; Sudasinghe, S. L.
Introduction: The assistance of an emphasis on financial indicators including return on total assets, growth in gross written premiums, underwriting risk, solvency margin, and financial leverage reinsurance ratio, this study examines the factors that influence the demand for fire reinsurance in the Sri Lankan general insurance market. Methodology: The general insurance market in Sri Lanka was the study's target audience. All secondary data used in this study comes from the annual reports of general insurance companies and the IRCSL between 2015 and 2022. The study employs a quantitative research approach with deductive research logic. Statistical tests like descriptive statistics, diagnostic tests like correlation, heteroscedasticity, serial autocorrelation, cross-sectional dependence, and regression analysis were among the statistical tests performed on the data using STATA software. Findings: The findings of the study highlighted that return on total assets, growth of gross written premium, and solvency margin are the key determinants of the demand for fire reinsurance in the Sri Lankan general insurance market. Financial leverage and underwriting risk have an insignificant relationship with the demand for reinsurance in the fire sector. Conclusions: The study comes to the conclusion that maximizing reinsurance methods and structure for Sri Lankan general insurance companies requires careful management of return on total assets, growth of gross written premiums, and the maintenance of strong solvency margins.
The Determinants of the Demand for Motor Reinsurance in Sri Lankan General Insurance Market
(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Hettiarachchi, C. K.; Sudasinghe, S. L.
Introduction: This study investigates the determinants of the demand for motor reinsurance in the Sri Lankan General Insurance market, focusing on financial indicators such as return on total assets, growth of gross written premiums, underwriting risk, solvency margin, financial leverage, and reinsurance ratio. The purpose of this study is to identify what are the factors affecting the demand for motor reinsurance in the Sri Lankan General Insurance market. Methodology: The target population of this study was the Sri Lankan General Insurance market. The study applies the quantitative research approach with deductive research logic, and all the secondary data are taken from the annual reports of the General Insurance companies and the IRCSL from 2015 to 2022. Data analyzed by using STATA software, which included statistical tests such as descriptive statistics, diagnostic tests including correlation testing, heteroscedasticity testing, serial autocorrelation testing, cross-sectional dependency, and regression analysis. Findings: The findings of the study highlighted that underwriting risk and solvency margin are the key determinants of the demand for motor reinsurance in the Sri Lankan General Insurance market. Higher underwriting risk drives insurers to cede more risks to reinsurers, supporting the risk-bearing hypothesis. Conversely, companies with stronger solvency margins tend to retain more risks. Conclusions: The study concludes that managing underwriting risk and maintaining robust solvency margins are critical for optimizing reinsurance strategies and structure for the Sri Lankan General Insurance companies.
The Firm Specific Internal Factors Affecting Financial Performance of Life Insurance
(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Babilathenna, B. M. K. K.; Sudasinghe, S. L.
Introduction: This study investigates the financial intricacies of Sri Lanka’s life insurance industry by examining how premium income, claim expenses, and investment returns impact net income. These internal factors are pivotal in shaping financial performance, making them essential for insurers striving to optimize profitability. By uncovering the interplay between these variables, this research aims to illuminate strategies for navigating the sector’s financial challenges. Methodology: The analysis focused on six life insurance companies listed with the Insurance Regulatory Commission of Sri Lanka (IRCSL) that provided complete financial disclosures from 2012 to 2022. These firms were selected using purposive sampling, ensuring relevance and data quality. A panel data regression model, processed with the STATA application, was utilized to evaluate the relationships between premium income, claim expenses, and investment returns. This rigorous approach provided nuanced insights into their influence on net income. Findings: The findings revealed a complex dynamic among the three variables. Investment returns emerged as the most significant driver, positively influencing net income and highlighting their vital role in financial stability. Surprisingly, premium income exhibited a significant negative impact, suggesting inefficiencies in managing these inflows, possibly due to higher associated costs or misaligned operational strategies. Claim expenses, while not statistically significant at the 5% level, displayed a negative impact at the 10% level, underscoring their potential to strain financial resources subtly. Conclusion: This study underscores the challenges facing Sri Lanka’s life insurers. While premium collection remains a priority, inefficiencies in its management can erode profitability. Simultaneously, claim expenses demand careful oversight to mitigate latent financial risks. The key to overcoming these hurdles lies in enhancing investment strategies and adopting robust risk management frameworks. These findings enrich the existing body of knowledge and provide actionable insights for stakeholders in the life insurance sector.
The Firm’s Specific Factors Affecting the Financial Performance of General Insurance Companies in Sri Lanka
(Department of Finance, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka., 2025) Kavinya, W. A. D. E.; Sudasinghe, S. L.
Introduction: The financial performance of general insurance companies is influenced by various firm-specific factors, including premium income, claim costs, underwriting results, and financial leverage. These factors are crucial in determining the profitability and overall financial health of insurance firms. This study aims to empirically test the impact of these firm-specific factors on the financial performance of general insurance companies in Sri Lanka. Methodology: This study on the impact of premium income, claim cost, underwriting results, and financial leverage on the financial performance of general insurance companies in Sri Lanka outlines the approach used to analyze these factors. The study uses a quantitative approach, relying on secondary data from the financial reports of 10 selected general insurance companies in Sri Lanka. Key variables, including premium income, claim costs, underwriting results, and financial leverage (debt-to-equity ratio), are measured and analyzed using statistical tools such as regression analysis to assess their effect on financial performance. Financial performance is measured using Return on Assets (ROA) as a dependent variable. Data analysis is performed using Random-effects panel regression models. The sample includes both publicly listed and private insurance companies, and the analysis focuses on data over a defined period. Findings: The results of the study revealed that premium income and underwriting results have a significant positive impact on ROA, suggesting that higher premium income and better underwriting practices enhance financial performance. Conversely, higher claim costs and increased financial leverage are found to have a negative effect on profitability, reducing ROA. These findings emphasize the importance of managing underwriting practices and claim costs, while also controlling financial leverage to improve overall financial performance. Conclusion: The study underscores the significant role that premium income, claim costs, underwriting results, and financial leverage play in shaping the financial performance of general insurance companies in Sri Lanka. To enhance profitability and solvency, insurance firms should focus on increasing premium income, optimizing underwriting results, and managing claim costs and financial leverage effectively. These insights provide valuable guidance for investors, management, and policymakers aiming to improve the financial health of the Sri Lankan insurance industry.