Determinants Of Financial Solvency In Algerian Insurance Companies

Abstract

This study aims to examine the impact of insurance premiums and compensation payments on the financial solvency of Algerian insurance companies over the period 2012-2022. Using panel data from 16 insurance firms and applying fixed and random effects models, the research identifies key operational determinants influencing solvency. The results reveal a statistically significant positive relationship between insurance premiums and financial solvency, suggesting that higher premium revenues strengthen the solvency position of firms. However, the effect of compensation payments was found to be statistically insignificant. These findings highlight the importance of optimising premium policies to enhance financial stability. The study provides empirical insights for policymakers and insurance managers seeking to improve solvency performance in the Algerian insurance sector