The Effect of Risk-Based Capital, Assets, Inflation Rate, and Interest Rate on Sustainable Growth Rate Mediated by Financial Performance in General Insurance Companies in Indonesia

Diwe Novara; Willy Arafah; Wahyuningsih Santosa

doi:10.55227/ijhess.v5i1.1716

Authors

Diwe Novara Doctor of Economics Program/Faculty of Economics and Business/Universitas Trisakti
Willy Arafah Doctor of Economics Program/Faculty of Economics and Business/Universitas Trisakti
Wahyuningsih Santosa Doctor of Economics Program/Faculty of Economics and Business/Universitas Trisakti

DOI:

https://doi.org/10.55227/ijhess.v5i1.1716

Keywords:

Risk Based Capital, Asset, Inflation Rate, Interest Rate, Financial Performance, Sustainable Growth Rate, General Insurance

Abstract

This study aims to examine the impact of risk-based capital, total assets, inflation rate, and benchmark interest rate on sustainable growth, with financial performance serving as a mediating variable, in the context of general insurance companies in Indonesia. The analytical method employed is panel data regression, utilizing the E-Views 12 software. The research sample comprises 59 general insurance firms registered with the Financial Services Authority (OJK) over the period 2018 to 2023, resulting in a total of 318 observations. The findings reveal that risk-based capital exerts a significant negative influence on sustainable growth, while it has a significant positive effect on financial performance. Total assets do not have a direct impact on sustainable growth but positively contribute to enhancing financial performance. Inflation is found to positively affect sustainable growth but negatively influence financial performance. Conversely, the benchmark interest rate has a negative effect on sustainable growth but demonstrates a positive association with financial performance. Furthermore, financial performance significantly and positively affects sustainable growth and serves as a mediating factor in the relationship between risk-based capital, total assets, inflation, and interest rates with sustainable growth.

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