Factors Affecting the Performance of Insurance Companies in Russian Federation

Purpose. Insurance market in Russian Federation has rapidly grown in recent years. At the same time, despite numerous studies investigating the determinants influencing financial performance of insurance companies in various countries, there was a lack of studies investigating determinants impacting the insurers' performance in Russian Federation. Methodology. Financial secondary data of 45 insurance companies and groups uninterruptedly operating in Russian Federation within the period from 2012 to 2018 were researched by way of descriptive analysis, correlation analysis, multiple linear regression and factor analysis. Approach. It was revealed during the study that return on assets (ROA) has positive relationship with size of the company, return on equity (ROE), liquidity ratio and claim ratio. Inflation and premium growth rate have negative relationship with ROA. The research found that investigated variables (size of company, ROE, liquidity ratio, premiums growth rate, claims ratio and inflation) comprise 45.1% of the total variability in the performance of insurance companies. 54.9 % is affected by other variables not included in this study. This provides a room for further studies of other factors influencing the financial performance of insurance companies in Russian Federation. Findings. The results of this study can be applied both by scientists and insurance professionals for further researches both in Russian federation and internationally, including industry-based investigations with the purpose of defining determinants and developing recommendations and policies for insurance industry. Insurance top managers and professionals can define and adjust strategies and tactics of insurance companies on the basis of findings of this study.