Proceedings of the 2nd International Conference on Contemporary Risk Studies, ICONIC-RS 2023, 21-22 September 2023, Bali, Indonesia

Research Article

The Effect of the Early Warning System (EWS) Ratio on the Profitability of the Insurance Industry in Indonesia (Empirical Study of Indonesian Stock Exchange Insurance 2018-2022)

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  • @INPROCEEDINGS{10.4108/eai.21-9-2023.2345690,
        author={Puja Sakti Dewa Yudhis Rahmana and Elan Nurhadi Purwanto},
        title={The Effect of the Early Warning System (EWS) Ratio on the Profitability of the Insurance Industry in Indonesia (Empirical Study of Indonesian Stock Exchange Insurance 2018-2022)},
        proceedings={Proceedings of the 2nd International Conference on Contemporary Risk Studies, ICONIC-RS 2023, 21-22 September 2023, Bali, Indonesia},
        publisher={EAI},
        proceedings_a={ICONIC-RS},
        year={2024},
        month={6},
        keywords={ews early warning system solvency margin underwriting premium growth return on earnings insurance},
        doi={10.4108/eai.21-9-2023.2345690}
    }
    
  • Puja Sakti Dewa Yudhis Rahmana
    Elan Nurhadi Purwanto
    Year: 2024
    The Effect of the Early Warning System (EWS) Ratio on the Profitability of the Insurance Industry in Indonesia (Empirical Study of Indonesian Stock Exchange Insurance 2018-2022)
    ICONIC-RS
    EAI
    DOI: 10.4108/eai.21-9-2023.2345690
Puja Sakti Dewa Yudhis Rahmana1,*, Elan Nurhadi Purwanto1
  • 1: Universitas Pertamina
*Contact email: pujadewasakti@gmail.com

Abstract

This study examines the effect of insurance companies' early warning system ratios on return on earnings. The independent variables in this study include the margin solvency ratio, the underwriting ratio, and the premium growth ratio. At the same time, there is a ratio of return on earnings as the dependent variable. The samples in this study are eight insurance companies taken using the purposive sampling method from a total population of 22 insurance companies listed on the IDX from 2018-2022. The analytical method used is panel data analysis, descriptive statistics, classic assumption test, F test, and regression test using the fixed effect model (FEM) method—data processing using STATA 17. The results showed that the solvency and underwriting margin variables partially did not have a significant positive effect on return on earnings. In contrast, the premium growth ratio variable significantly positively impacted return on earnings. The findings showed that premium growth increased significantly due to economic recovery after the Covid-19 pandemic. Research also shows that all independent variables simultaneously have significant effect on return on earnings.