The Effect of ESG, Operational Capacity, Claim Ratio, and Liquidity on Financial Distress of Insurance Companies Moderated by Risk-Based Capital
DOI:
https://doi.org/10.5555/ijosmas.v6i5.523Keywords:
ESG, Operational Capacity, Claim Ratio, Liquidity, Financial Distress, Risk-Based Capital.Abstract
This study investigates the influence of Environmental, Social, and Governance (ESG), operational capacity, claim ratio, and liquidity on financial distress in Indonesian insurance companies, with Risk-Based Capital (RBC) as a moderating variable. Using a quantitative approach with saturated sampling, the study analyzed 18 insurance companies listed on the Indonesia Stock Exchange. Panel regression with EViews 12 was applied to test the hypotheses. The results show that ESG and liquidity do not significantly affect financial distress, while operational capacity has a positive effect and claim ratio has a negative effect. Moreover, RBC does not moderate the relationship between ESG or liquidity and financial distress but significantly strengthens the effects of operational capacity and claim ratio. These findings highlight the importance of operational efficiency and claim management in reducing financial distress, while emphasizing the role of RBC as a financial safeguard in the insurance industry.
Downloads
References
Altman, E. I. (2013). Predicting financial distress of companies: Revisiting the Z-score and ZETA® models. Handbook of Research Methods and Applications in Empirical Finance.
Almilia, L. S. (2006). Prediksi kondisi financial distress perusahaan go publik dengan menggunakan analisis multivariat. Jurnal Ekonomi dan Bisnis, 11(2), 147–163.
Almilia, L. S., & Kristijadi. (2003). Analisis rasio keuangan untuk memprediksi kondisi financial distress perusahaan manufaktur yang terdaftar di BEJ. Jurnal Akuntansi & Auditing Indonesia, 7(2), 183–210.
Ayu, I. G. A. D., & Budiasih, I. G. A. N. (2020). Risk based capital, ukuran perusahaan, pertumbuhan premi, dan financial distress. E-Jurnal Akuntansi, 30(5), 1169–1180.
Brigham, E. F., & Houston, J. F. (2019). Fundamentals of Financial Management (15th ed.). Cengage Learning.
Buallay, A. (2020). Sustainability reporting and firm’s performance: Comparative study between manufacturing and financial sectors. International Journal of Productivity and Performance Management, 69(3), 431–445.
Gillan, S. L., Koch, A., & Starks, L. T. (2021). Firms and social responsibility: A review of ESG and CSR research in corporate finance. Journal of Corporate Finance.
Ha, H. H., Dang, N. H., & Tran, M. D. (2023). Financial distress forecasting with a machine learning approach. Corporate Governance and Organizational Behavior Review, 7(3).
Jesih, J., & Wizanasari, W. (2023). Pengaruh kapasitas operasi, pertumbuhan penjualan dan arus kas terhadap financial distress. Jurnal Akuntansi, Keuangan, Pajak Dan Informasi (JAKPI), 3(2), 35–49.
Kariuki, D. W. K., Muturi, W., & Njeru, A. (2021). Influence of liquidity on financial performance of insurance companies in Kenya. Journal of Agriculture, Science and Technology, 20(3), 94–101.
Kebede, T. N., Tesfaye, G. D., & Erana, O. T. (2024). Determinants of financial distress: Evidence from insurance companies in Ethiopia. Journal of Innovation and Entrepreneurship, 13(1), 17.
Lee, C. C., & Lin, C. W. (2016). The impact of capital structure on firm performance: Evidence from Taiwan. Journal of Management, 33(2), 1–15.
Lee, H. Y. (2017). Risk-based capital regulation and its impact on the insurance industry. Insurance Markets and Companies, 8(1), 20–32.
Otoritas Jasa Keuangan. (2020). Peraturan OJK tentang Kesehatan Keuangan Perusahaan Asuransi dan Reasuransi. Jakarta: OJK.
Otoritas Jasa Keuangan. (2021). Laporan Tahunan Perusahaan Asuransi di Indonesia. Jakarta: OJK.
Otoritas Jasa Keuangan. (2022). Statistik Perasuransian Indonesia. Jakarta: OJK.
Rahmawati, N., & Puspitawati, L. (2021). Analisis pengaruh rasio klaim, risk based capital, dan underwriting terhadap financial distress. Jurnal Akuntansi Multiparadigma, 12(3), 455–467.
Siswanti, I., Riyadh, H. A., & Prowanta, E. (2024). Digital transformation’s moderating role on financing and capital quality impacts for sustainable Islamic rural banking in Indonesia. International Journal of Sustainable Development & Planning, 19(3).
Velte, P. (2019). Does ESG performance have an impact on financial performance? Evidence from Germany. Journal of Global Responsibility, 10(4), 322–338.
