Abstract:

This study aim to examine the growth of insurance premiums and the number of claims made by joint venture insurance companies in Indonesia with goal to stimulate the increase in stock prices through return on equity. Associative research was chosen as the research design, with the research population involves 22 companies, which can be classified into five joint venture insurance companies in Indonesia that comply with the criteria. Path analysis is the data analytic method used to investigate the probability of specific hypotheses. According to research, premium growth strengthen return on equity while claim expenses possesses negative impact on return on equity. Return on equity could mediate the influence of claim expenses towards the stock price but failed to intervene premium growth on stock price of joint venture insurance company. Premium growth, and claims expenses as well as return on equity respectively cannot affecting stock price. As per this study, the companies must consistently evaluate the underwriting process strategy for the company's sustainability in order to lure investors and boost the stock price.

Keywords:

Premium growth; claims expenses; return on equity; stock price.

JEL classifications:

C33, C38, E21, E22, E26, G20.

How to Cite:

Hedwigis Esti Riwayati, Aviliani Aviliani and Zati Aman. How Does Financial Performance Affect the Stock Price of General Insurance Companies in Indonesia?. [ref]: vol.22.2024. available at: https://refpress.org/ref-vol22-a16/