Dissecting Indonesian Insurance Profitability and Efficiency: Du Pont Diagnostic Tool.
DOI:
https://doi.org/10.51903/kompak.v17i2.1905Keywords:
Financial Performance, Insurance Companies, Du Pont Method, Profitability, Efficiency, Risk Management, Corporate StrategyAbstract
This research compares the financial performance of insurance companies in Indonesia using the Du Pont method, identifies the determinants of differences in profitability and efficiency, and provides strategic recommendations. The methodology involves analyzing the 2023 audited financial statements of PT Asuransi Dayin Mitra Tbk and PT Asuransi Bintang Tbk as samples, applying the Du Pont method, financial ratios, and qualitative analysis. The results reveal a significant difference in profitability, with PT Asuransi Dayin Mitra Tbk excelling in net profit margin, asset turnover, and a conservative capital structure, while PT Asuransi Bintang Tbk outperforms in underwriting risk management, claims handling, and aggressive marketing strategies. Strategic recommendations include maintaining strengths, exploring revenue growth, enhancing cost efficiency, and adjusting capital structure. This research contributes to understanding the dynamics of financial performance in the Indonesian insurance industry.
References
[1] J. Cotter, “Understanding the nature of risk disclosures by conventional and Islamic banks,” Manag. Financ., vol. 38, no. 7, pp. 718–739, 2012.
[2] A. Uyar, “The importance of financial reporting for corporate governance and audit: Evidence from Turkey,” Int. J. Corp. Gov., vol. 10, no. 1, pp. 1–19, 2019.
[3] Wiwik Lestari, Dyah Palupiningtyas, Dyan Triana Putra, Septa Intiar, and Umar Abdul Jabbar, “Analisis Pengelolaan Dana Desa Guna Kesejahteraan Masyarakat Pada Desa Semowo Kecamatan Pabelan Kabupaten Semarang,” J. Ekon. Manaj. Pariwisata dan Perhotelan, vol. 1, no. 3, pp. 372–378, 2022, doi: 10.55606/jempper.v1i3.971.
[4] S. H. Penman, Financial Statement Analysis and Security Valuation, vol. 5th Editio. McGraw-Hill Education, 2012.
[5] K. R. Jones, Financial statement analysis., vol. 6, no. 1. McGraw-Hill Education, 1998. doi: 10.5848/apbj.2011.00047.
[6] R. G. Rhyne and E. F. Brigham, Fundamentals of Financial Management., vol. 34, no. 5. Cengage Learning, 1979. doi: 10.2307/2327254.
[7] K. G. Palepu and P. M. Healy, Business Analysis and Valuation: Using Financial Statements. Cengage Learning, 2008. [Online]. Available: http://books.google.com/books?hl=en&lr=&id=tCspQP0CYgcC&oi=fnd&pg=PR7&dq=Strategy+process,+cintent,+context+an+international+perspective&ots=-gMZvHbLMt&sig=vGe72LHzg4hofsDcvBGeWHr88RI
[8] M. K. Waruwu and D. Palupiningtyas, “Analysis of the Influence of Macro Economic Factors on the Financial Performance of the Nadira Fashion Company in Randugunting Village, Bergas District, Semarang Regency,” J. Bus. Manag. Econ. Dev., vol. 2, no. 02, pp. 626–634, 2024, doi: 10.59653/jbmed.v2i02.677.
[9] OJK, “Statistik Perasuransian 2022,” 2022. [Online]. Available: https://ojk.go.id/id/kanal/iknb/data-dan-statistik/asuransi/Pages/Statistik-Perasuransian-2022.aspx%0Ahttps://ojk.go.id/id/kanal/iknb/data-dan-statistik/asuransi/Documents/Pages/Statistik-Perasuransian-2021/Statistik Perasuransian Indonesia 2021.pdf
[10] Asosiasi Asuransi Umum Indonesia (AAUI), “Data Kinerja Industri Asuransi Umum Indonesia 2022,” 2023. [Online]. Available: https://www.aaui.or.id/data-industri/kinerja-industri-asuransi-umum-indonesia
[11] M. T. Soliman, “The use of DuPont analysis by market participants,” Account. Rev., vol. 83, no. 3, pp. 823–853, 2008, doi: 10.2308/accr.2008.83.3.823.
[12] S. H. Penman, Financial statement analysis and security valuation (5th ed.). McGraw-Hill Education, 2013.
[13] S. A. Ross, R. W. Westerfield, J. F. Jaffe, and B. D. Jordan, Corporate finance (13th ed.). McGraw-Hill Education, 2022.
[14] D. L. Eckles, M. Halek, E. He, D. W. Sommer, and R. Zhang, “Earnings smoothing, executive compensation, and corporate governance in the property–casualty insurance industry,” J. Risk Insur., vol. 81, no. 4, pp. 761–790, 2014.
[15] W. Shen, C. C. Yang, and L. F. Zanna, “Government and external drivers of bank pricing behavior: Evidence from a small open economy.,” J. Int. Financ. Mark. Institutions Money, vol. 50, pp. 60–83, 2017.
[16] S. G. Fier, K. A. McCullough, and J. M. Carson, “Internal capital market efficiency in the property-liability insurance industry.,” J. Insur. Issues, vol. 41, no. 1, pp. 1–29, 2018.
[17] M. S. Amuzu, “Cash Flow Ratio As a Measure of Performance of Listed,” Durham University, 2010. [Online]. Available: http://www.stclements.edu/grad/gradmaxw.pdf
[18] N. Khanqah, V. T.Khani and P. Z. Fard, “Evaluation of financial performance of insurance companies using a combination of ratio analysis and DuPont analysis,” Int. J. Financ. Manag. Account., vol. 3, no. 9, pp. 63–72, 2018.
[19] S. Ramu and S. . Satyanarayana, “Financial Performance Analysis of Hdfc Using Dupont Analysis,” Econ. Comput. Sci., vol. 05, no. 02, pp. 46–52, 2019.
[20] S. Karthikeyan and M. Ramachandran, “DuPont analysis of selected Indian insurance companies,” Int. J. Appl. Res., vol. 2, no. 5, pp. 530–534, 2016.
[21] G. M. Ullah and M. Nishat, “Financial performance analysis of insurance companies in Pakistan using DuPont model,” Int. J. Econ. Financ., vol. 9, no. 7, pp. 134–145, 2017.
[22] M. M. Saeed, A. A. Gull, and M. Y. Rasheed, “Consolidated performance analysis of insurance industry of Pakistan using Du Pont model,” J. Financ. Econ., vol. 2, no. 3, pp. 83–92, 2014.
[23] B. M. Chand, S., & Misra, “Financial performance analysis of Indian insurance companies: A comparative study.,” Glob. J. Multidiscip. Stud., vol. 4, no. 5, pp. 104–113, 2015.
[2] A. Uyar, “The importance of financial reporting for corporate governance and audit: Evidence from Turkey,” Int. J. Corp. Gov., vol. 10, no. 1, pp. 1–19, 2019.
[3] Wiwik Lestari, Dyah Palupiningtyas, Dyan Triana Putra, Septa Intiar, and Umar Abdul Jabbar, “Analisis Pengelolaan Dana Desa Guna Kesejahteraan Masyarakat Pada Desa Semowo Kecamatan Pabelan Kabupaten Semarang,” J. Ekon. Manaj. Pariwisata dan Perhotelan, vol. 1, no. 3, pp. 372–378, 2022, doi: 10.55606/jempper.v1i3.971.
[4] S. H. Penman, Financial Statement Analysis and Security Valuation, vol. 5th Editio. McGraw-Hill Education, 2012.
[5] K. R. Jones, Financial statement analysis., vol. 6, no. 1. McGraw-Hill Education, 1998. doi: 10.5848/apbj.2011.00047.
[6] R. G. Rhyne and E. F. Brigham, Fundamentals of Financial Management., vol. 34, no. 5. Cengage Learning, 1979. doi: 10.2307/2327254.
[7] K. G. Palepu and P. M. Healy, Business Analysis and Valuation: Using Financial Statements. Cengage Learning, 2008. [Online]. Available: http://books.google.com/books?hl=en&lr=&id=tCspQP0CYgcC&oi=fnd&pg=PR7&dq=Strategy+process,+cintent,+context+an+international+perspective&ots=-gMZvHbLMt&sig=vGe72LHzg4hofsDcvBGeWHr88RI
[8] M. K. Waruwu and D. Palupiningtyas, “Analysis of the Influence of Macro Economic Factors on the Financial Performance of the Nadira Fashion Company in Randugunting Village, Bergas District, Semarang Regency,” J. Bus. Manag. Econ. Dev., vol. 2, no. 02, pp. 626–634, 2024, doi: 10.59653/jbmed.v2i02.677.
[9] OJK, “Statistik Perasuransian 2022,” 2022. [Online]. Available: https://ojk.go.id/id/kanal/iknb/data-dan-statistik/asuransi/Pages/Statistik-Perasuransian-2022.aspx%0Ahttps://ojk.go.id/id/kanal/iknb/data-dan-statistik/asuransi/Documents/Pages/Statistik-Perasuransian-2021/Statistik Perasuransian Indonesia 2021.pdf
[10] Asosiasi Asuransi Umum Indonesia (AAUI), “Data Kinerja Industri Asuransi Umum Indonesia 2022,” 2023. [Online]. Available: https://www.aaui.or.id/data-industri/kinerja-industri-asuransi-umum-indonesia
[11] M. T. Soliman, “The use of DuPont analysis by market participants,” Account. Rev., vol. 83, no. 3, pp. 823–853, 2008, doi: 10.2308/accr.2008.83.3.823.
[12] S. H. Penman, Financial statement analysis and security valuation (5th ed.). McGraw-Hill Education, 2013.
[13] S. A. Ross, R. W. Westerfield, J. F. Jaffe, and B. D. Jordan, Corporate finance (13th ed.). McGraw-Hill Education, 2022.
[14] D. L. Eckles, M. Halek, E. He, D. W. Sommer, and R. Zhang, “Earnings smoothing, executive compensation, and corporate governance in the property–casualty insurance industry,” J. Risk Insur., vol. 81, no. 4, pp. 761–790, 2014.
[15] W. Shen, C. C. Yang, and L. F. Zanna, “Government and external drivers of bank pricing behavior: Evidence from a small open economy.,” J. Int. Financ. Mark. Institutions Money, vol. 50, pp. 60–83, 2017.
[16] S. G. Fier, K. A. McCullough, and J. M. Carson, “Internal capital market efficiency in the property-liability insurance industry.,” J. Insur. Issues, vol. 41, no. 1, pp. 1–29, 2018.
[17] M. S. Amuzu, “Cash Flow Ratio As a Measure of Performance of Listed,” Durham University, 2010. [Online]. Available: http://www.stclements.edu/grad/gradmaxw.pdf
[18] N. Khanqah, V. T.Khani and P. Z. Fard, “Evaluation of financial performance of insurance companies using a combination of ratio analysis and DuPont analysis,” Int. J. Financ. Manag. Account., vol. 3, no. 9, pp. 63–72, 2018.
[19] S. Ramu and S. . Satyanarayana, “Financial Performance Analysis of Hdfc Using Dupont Analysis,” Econ. Comput. Sci., vol. 05, no. 02, pp. 46–52, 2019.
[20] S. Karthikeyan and M. Ramachandran, “DuPont analysis of selected Indian insurance companies,” Int. J. Appl. Res., vol. 2, no. 5, pp. 530–534, 2016.
[21] G. M. Ullah and M. Nishat, “Financial performance analysis of insurance companies in Pakistan using DuPont model,” Int. J. Econ. Financ., vol. 9, no. 7, pp. 134–145, 2017.
[22] M. M. Saeed, A. A. Gull, and M. Y. Rasheed, “Consolidated performance analysis of insurance industry of Pakistan using Du Pont model,” J. Financ. Econ., vol. 2, no. 3, pp. 83–92, 2014.
[23] B. M. Chand, S., & Misra, “Financial performance analysis of Indian insurance companies: A comparative study.,” Glob. J. Multidiscip. Stud., vol. 4, no. 5, pp. 104–113, 2015.
Downloads
Published
2024-12-01
How to Cite
Guntur Tri Hidayatulloh, Dyah Palupiningtyas, & Tri Maryani. (2024). Dissecting Indonesian Insurance Profitability and Efficiency: Du Pont Diagnostic Tool. Kompak :Jurnal Ilmiah Komputerisasi Akuntansi , 17(2), 64–72. https://doi.org/10.51903/kompak.v17i2.1905
Issue
Section
Articles
.png)
