Analysis of Factors Influencing Investment Decisions in Insurance Companies in Ethiopia
DOI:
https://doi.org/10.47604/jsar.2755Keywords:
Investment Decision, Insurance CompaniesAbstract
Purpose: The aim of the study was to analyze the analysis of factors influencing investment decisions in insurance companies in Ethiopia.
Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
Findings: The analysis of factors influencing investment decisions in Ethiopian insurance companies highlights key determinants. Regulatory policies shape asset allocation and risk management strategies, while economic stability dictates investment yields and diversification. Company-specific factors such as financial strength and liquidity guide decisions to balance returns and solvency. Managerial expertise is crucial for effective decision-making, adapting to global economic trends and geopolitical shifts to manage risks and leverage opportunities in Ethiopia's insurance market.
Unique Contribution to Theory, Practice and Policy: Modern portfolio theory (MPT), agency theory & behavioral finance theory may be used to anchor future studies on analyze the analysis of factors influencing investment decisions in insurance companies in Ethiopia. Develop and implement adaptive risk management strategies that account for regulatory changes and economic uncertainties. Advocate for regulatory frameworks that balance compliance requirements with flexibility for insurers to innovate in their investment strategies. Policy recommendations include periodic reviews of regulatory standards to accommodate evolving market conditions and technological advancements.
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