Abstract:
The purpose of this study is to examine the impact of product diversification on the
financial performance of listed insurance companies in Sri Lanka. The return on
assets ratio (ROA) used as financial performance measures and measures the product
diversification by using diversification life assurance product line and diversification
general insurance product line. This study used panel data consisting of 8 insurance
companies in Sri Lanka for the period of 2015-2019. This research is conducting
based on secondary data. Data will be obtained from the financial reports and
websites of sample insurance companies and information from annual reports of the
listed insurance companies in Sri Lanka and also gathered from the website of CSE
from2015 to 2019. STATA used to analyze data. The fixed effect model was chosen
to examine the impact of product diversification on financial performance.
The study concluded that diversification of product lines in insurance sector has
significant positive effect on the financial results of the companies in the insurance
sector listed companies in Sri Lanka. It is recommend for the insurance companies to
pay more attention to financial performance in terms of product diversification and try
to turn the effect into a favorable one
