FINANCIAL VIABILITY OF MALAYSIAN TOP-10 PENSION FUNDS AND INSURANCE COMPANIES BASED ON MULTIPLE EXPLANATORY VARIABLES

Abstract

Pension funds are investment vehicles that receive contributions from employer, staff, or both
during the working life of workers to provide them with potential pension income. Despite
these plans, seniors must face a tremendous burden, because the only way they can
compensate for their old age is by saving for retirement during their working life. Hence,
given that employees' life expectancies are uncertain, it would be hard to know how much
they should save for retirement. Therefore, this research identifies that the pension funds are
thus able to resolve these risks by delivering lifetime annuities in exchange for contributions
made during working years. In this paper, we will examine the factors that influence the
financial performance of ten major life insurance and pension funds companies during the
period 2013 to 2018 using regression analysis to study the significance of these factors. The
life insurance and pension fund companies are Allianz General Insurance Berhad, Tokio
Marine Life Insurance Bhd, Great Eastern General Insurance Berhad, RHB Insurance Berhad,
Prudential Assurance Malaysia Berhad, AIA Berhad, AXA Affin Life Insurance Berhad,
Manulife Insurance Berhad, Chubb Insurance Berhad and Hong Leong Assurance Berhad.
Data is derived from the financial statements of the respective companies to determine cash
ratio, size of the company, return on assets, debt-to - equity ratio, and return on equity,
inflation and economic growth. Consequently, net income is used as the proxy data to assess
a firm's financial performance. Therefore, this analysis will use and predict the data collected
to assess the profitability of the respective businesses.