Empirical Research on Financial Distress in Taiwan Life Insurance Industry

• Main Authors: CHIEN,PEI-PEI, 錢佩佩
• Other Authors: CHEN,YEN-PAO
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/ry67ej

碩士 === 東吳大學 === 會計學系 === 107 === ABSRACT Taiwan people love to purchase insurance products. It means insurance policies have been so closed to our daily life. Taiwan government permitted insurance industry in 1986, but until 2000, its profitability has not been good as ever, because of the sliding interest rate and the slowing down economy growth. In August 2009, Guohua Life Insurance was brought under government receivership due to deteriorating asset value. So did Global Life Insurance and Singfor Life that have been taken over in August 2014. Therefore, it’s really a big issue that insurance company development can be predicted by its financial deterioration. The empirical study is based mainly on 135 North America insurance companies (include 90 listed and 45 unlisted companies, 2008-2017) research data from Compustat, Standard & Poor’s Research Insight-North American, to increasing study samples (because there were only two companies quitted from Taiwan insurance market in the same period.) I used insurance related financial factors for Gis regression analysis, based on Z-score model published by Altman (1968), to verify if financial deterioration can be an early warning factor to insurance company’s development. Also based on the Z-score model, calculated risk value Z of Taiwan’s insurance companies in 2016 to 2018. Considered five financial ratio variables of insurance industry from its characteristic: working capital/total assets, retained earnings/total assets, pre-tax pre-earnings surplus/total assets, total shareholders' equity/total liabilities and premium income/total assets. It shows that working capital/total assets, retained earnings/total assets, total shareholders' equity/total liabilities and premium income/total assets have significantly effects on prediction to company development. In the other hand, working capital/total assets and premium income/total assets are prone to verify in different tendency caused by financial environment in different period. However, the pre-tax pre-earnings surplus/asset total indicators has no significant effect to the insurance industry.