IMPACT OF REINSURANCE ON INSURANCE COMPANY PERFORMANCE

This study investigates the impact of reinsurance on the financial performance of insurance companies using an empirical panel data framework. Reinsurance is considered a strategic risk management tool that enables insurers to stabilize underwriting results, optimize capital allocation, and mitigate loss volatility. The empirical analysis employs key performance indicators, namely return on assets (ROA), return on equity (ROE), and the combined ratio, to assess insurer performance. The results indicate that reinsurance utilization has a statistically significant positive effect on ROA and ROE, while demonstrating a negative relationship with the combined ratio. These findings confirm that well-structured reinsurance programs enhance underwriting efficiency, financial stability, and long-term sustainability of insurance companies, particularly in emerging markets.