The Effect of Solvency on Return on Assets: An Applied Study in Iraqi Insurance Companies for The Period (2012-2020)

Abstract

The aim of the research is to identify the effect of solvency on the return on assets, where a number of indicators were used to measure solvency, namely (liquidity (trading ratio), net cash flow, debt ratio, ownership ratio), and the research was applied to a sample of insurance companies. The Iraqi (5) companies listed in the Securities Commission for the period from 2012 - 2020, the model (Panel data for standard tests was used). The study has reached a set of results, most notably (there is an impact relationship between solvency and return on assets), and the study recommended the need for insurance companies to provide support and attention to indicators of solvency because of their importance in strengthening the company’s financial position and giving a safety indicator to creditors with the ability of companies to fulfill their financial obligations , and this will be reflected positively in achieving a return on assets.