Abstract
This article investigates the relationship between firm specific factors and macroeconomics on profitability in Taiwanese property-liability insurance industry using the panel data over the1999 through 2009 time period. Using operating ratio and return on assets (ROA) for the two kinds of profitability indicators to measure insurers’ profitability. The results show that underwriting risk, reinsurance usage, input cost, return on investment (ROI) and financial holding group have significant influence on profitability in both operating ratio and ROA models. The insurance subsidiaries of financial holding group compared with other insurance companies, showing lower profitability. In addition, economic growth rate has significant influence on profitability in operating ratio model but insignificant influence on profitability in ROA model. The findings contribute to insurance operation in the property-liability insurance industry and should be of interest to regulators, investors and policyholders.