The Relationship Between Financial Capacity And Investment Decisions In The Insurance Industry An Applied Study On The Iraqi Insurance Company

Abstract

The study aims to identify the nature of the relationship between the financial capacity of the National Insurance Company and its impact on the company’s investment decisions. The researcher conducted the study in the Iraqi Insurance Company, as it is a leading and fundamental model in the government insurance sector in Iraq. This study is essential for analyzing the researcher's hypothesis regarding the existence of a statistical relationship between financial capacity and investment decisions. The study relied on the company's financial data and reports for the period 2014-2023. The most prominent conclusion reached by the researcher is the low levels of investment returns for the company, despite the substantial funds it spent on investments. The realized return on investment did not exceed 10%. This percentage indicates that the investment decisions made by the insurance company during the study period were inefficient. Consequently, it is observed that the National Insurance Company relied heavily on insurance premiums obtained from underwriting to generate the majority of its revenue. This could lead to financial hardship when there is a significant decline in insurance activities. In light of the above findings, the researcher offers recommendations, the most important of which is the actual adoption of the indicators identified in the study to assess the financial capacity of the company in the study sample and all other companies to support the insurance industry in Iraq.