I defended my thesis proposal on 27th January, 2016 at PIDE. Much thanks to Dr. Attiya Yasmeen Javeed (My supervisor) for supporting me at every step. My thesis are in progress and will complete it till end of June, 2016. For any information please, contact me @ shakeelshahzad_14@pide.edu.pk. Thanks and Regards, Shakeel Shahzad.

1. Presented By:
SHAKEEL SHAHZAD
(MPhil Economics and Finance)

2.  INTRODUCTION
 PROBLEM STATEMENT
 RESEARCH SIGNIFICANCE
 LITRATURE REVIEW
 RESEARCH HYPOTHESIS
 RESEARCH OBJECTIVES
 RESEARCH DESIGN
 ECONOMETRIC MODEL
 RESEARCH METHODOLOGY
 LIST OF REFRENCES
 THANK YOU
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3. 4/14/2016 3
Insurance
• Insurance Sector History and Background in Pakistan.
• Insurance sector is regulated under the Insurance Ordinance Act, 2000.
• SECP & Insurance sector.
• Factors that effect Performance of the Insurance companies.
• Impact of Corporate Governance on Insurance Sector.
• Financial Performance of Insurance sector in service sector of Pakistan.
Types of Insurance Companies
1. Life Insurance Companies
2. General Insurance Companies
3. Health Insurance Companies

4.  IT IS ESSENTIAL TO THE FOLLOWING PARTIES TO KNOW THAT WHICH
FACTORS INFLUENCE THE PERFORMANCE OF INSURANCE COMPANIES
IN PAKISTAN.
 Administration
 Government
 Investors
 Customers
 TO KNOW FINANCIAL PERFORMANCE OF INSURANCE COMPANIES IN
PAKISTAN.
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5.  Administration: Interested in identifying indicators of success and failure to
take the necessary actions to improve the performance of the company and
choose the right decisions.
 Government: Interested in knowing which companies operate successfully or
failed to take the necessary measures to avoid crises of the bankruptcy in these
companies.
 Investors: Interested in such studies in order to protect their investment, and
directing it to the optimal investment.
 Customers: Interested in knowing the ability of insurance companies to pay
their obligations based on the indicators of success of the companies.
 This study can contribute potentially as a stepping stone for further research in
the area.
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6.  (McCarran Ferguson Act 1945), Public Law 15, USA
 (Mayers and Smith, 1988), laws related to the formation, operations of insurer, and terms of
insurance contract and licensing.
 Kashish & Kashram (1998), Performance of Insurance Co: Jordans`
insurance industry used profitability as dependent variable/proxy by return on investment(ROI)
 (Agiobenebo & Ezirim, 2002), (relationship between profitability and financial intermediation in
Nigeria) Profitability with Premium +ive & Significant.
 Vigaykumar and Kadirvelu (2004), determinants of Insurance Companies , Age with Profitability.
 Hutchison and Cox (2006), examined the relationship between financial leverage and return on
equity for US banking industry.
 Chang, et al. (2013) investigated the causal relationship between the insurance activities and GDP,
 Lee, et al. (2013), long term and short term relationship between the GDP and real life insurance
premium of 41 countries.
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7.  This study has the central objective to
 Determine the factors that affect the performance of the insurance
companies.
 Observe empirically the effect of corporate governance and macro-
economic variables over the performance of insurance companies.
 Investigate the financial performance of insurance companies of
Pakistan.
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8.  Hypothesis-1
H0 There is no significant effect of firm’s specific variables on performance.
H1 There is significant effect of firm’s specific variables on performance.
 Hypothesis-2
H0 There is no significant effect of corporate governance on performance.
H1 There is significant effect of corporate governance on performance.
 Hypothesis-3
H0 There is no significant effect of macro-economic variables (inflation and interest rate) on performance.
H1 There is significant effect of macro-economic variables (inflation and interest rate) on performance.
 Hypothesis-4
H0 There is no significant impact of insurance company’s performance on Financial Development.
H1 There is significant impact of insurance company’s performance on Financial Development.
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9.  THE DATA FOR THIS RESEARCH WILL BE TAKEN FROM
 Balance sheet/financial reports of Insurance companies.
 Insurance association of Pakistan (IAP) Annual fact book.
 TYPE OF DATA
 Secondary nature
 TIME PERIOD
 nine years from 2005 – 2013
 NUMBERS OF COMPANIES
 35 insurance companies.
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10.  MODEL 1
PRit =α0 +β1LGit+β2GRit+β3TAit+β4SZit+β5LQit+β6AGit+ β7RKit +β8CGit+β9INFit+β10Iit+µit
(Ref: Chen and Wong, 2004)
There is one dependent variable i.e. profitability , and nine independent variables i.e. Leverage,
Growth, Tangibility, Size, Liquidity, Age, Risk.. Corporate Governance, Interest & Inflation.
 MODEL 2
FPt = α0 +β1tNIC+β2PLIt+β3PNLt+β4TIIt+β5INFt+µt
( Ref: Marijuana et al.2009)
There is one dependent variable i.e. Financial Performance and five independent variables i.e.
Number of insurance companies, premium of life insurance companies, premium of non-life
insurance companies, total investment of insurance companies and Inflation
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11.  MODEL 1
 In Model 1 multiple regression models will be used for the identification of
relationship and after this simple penal data tests will be used for instance
fixed effect and random effect tests. These are known as first generation
panel data models. Houseman tests will be implied to identify which model
will be used as per the condition.
 MODEL 2
 In Model 2 : Stationarity will be insured at first step using ADF Test then
moving towards co-integration analysis. We will use Johnson Co-
integration, Engle Granger or ARDL as per the data requirements. Hence
we will find out the short run and long run impact of the performance of
insurance companies over the financial development of Pakistan.
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12.  Athanasoglous P. Et Al., (2005), Bank-Specific, Industry- Specific and
Macroeconomic Determinants of Bank Profitability, Bank of Greece
Working Paper,
 No. 25 Hailu Zeleke (2007). Insurance in Ethiopia: Historical
Development, Present Status and Future Challenges. Addis Ababa:
Master Printing Press.
 Haise P, Sümeg K (2008). “The relationship between Insurance and
Economic Growth in Europe. A Theoretical and empirical analysis”.
Empirica, 35(4): 405-431.
 Adams MJ, Andersson LF, Lindmark M (2005). “The historical
Relation between Banking, Insurance And Economic Growth in
Sweden: 1830 to1998”,
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13. Thank You !
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