Abebaw Kassie (PhD)Geleta Haso Bame2025-03-062025-03-062024-03-09https://etd.aau.edu.et/handle/123456789/4998The development of social and financial stability, the growth of commerce and industry, and economic progress all depend critically on the presence and survival of powerful insurance companies. For several years, academics connected to the finance literature have been interested in profitability. But in the context of Ethiopia, the insurance industry received little attention. In order to determine the factors that affects the insurance businesses' profitability in Ethiopia, this study looks into the industry-specific, macroeconomic, and company-specific factors that were taken into account in the regression model. The study used secondary panel data covering the period 2018-2022 and out of the 18 insurance companies operating in the country, a sample of 17 insurers were selected by non-probability purposive sampling technique. To identify the relationship between the ROA and independent factors, a quantitative research technique and an explanatory way of research design were employed. Descriptive statistics, correlation analysis and fixed effect regression analysis were performed using the statistical software "Stata 14.2." to analyze profitability of the insurance companies in Ethiopia. Fixed Effect model regression results, suggest that industry-specific variables like market share and firm-specific variables like loss ratio, investment income ratio, and business age are significantly affects the profitability. The results also showed a positive correlation between market share, inflation, premium growth, reinsurance dependency, GDP growth, and investment income and profitability. The loss ratio, leverage, and age of the company were found to be negatively correlated with ROE. Ultimately, in order to keep their business profitable, managers should place a greater focus on investment opportunities, potential client, customer happiness, and pre-risk evaluation and selection, and claim handling.en-USThesis