Financial distress is a situation where a corporation is unable to meet its financial obligations, which may lead to bankruptcy or insolvency. This paper examines the determinants of financial distress of insurance companies in Palestine and Jordan. Data were collected from 7 Palestinian to 19 Jordanian insurance companies from 2011 to 2021. Random effect model for panel data estimation ware used in the empirical analysis in this study. According to the findings, a company’s profitability, firm size, and capital adequacy positively and significantly affect Altman Z-Score, which reduces the likelihood of financial distress for insurance companies in Palestine and Jordan. The loss ratio negatively impacts Altman Z-Score, increasing the possibility of financial distress for Palestine and Jordan-based insurance businesses. This study provides important insight to the management, creditors, policymakers and regulator about the financial distress and its determinants of insurance companies in Palestine and Jordan.

Title

Artificial Intelligence and Economic Sustainability in the Era of Industrial Revolution 5.0

Publisher

Springer Nature Switzerland

Publisher Country

Switzerland

Indexing

Scopus

Impact Factor

None

Publication Type

Online only

Volume

--

Year

2024

Pages

619–632