Using the "Altman" Model to Predict the Failure of Libyen Insurance Companies

Abstract

The study aimed to identify the ability of the model "Altman" The rate in predicting the failure of Libyan insurance companies during the period (2014-2018), To achieve this, the descriptive approach was relied on, with its documentary input, to search for sources in the field of insurance, predict financial failure, and the quantitative approach to calculate the indicators included in the composition of the model "Altman" rate and pointer (Z-Score), and rate of return on assets (ROA), And conduct the necessary descriptive statistics, in order to describe the study data, and calculate the horizontal analysis of the rate of return on assets (ROA), as part of the requirements for answering the study’s question and accessing the results of the study.

To achieve the aim of the study, a model was used "Altman" The rate in predicting the failure of establishments, where the study was conducted on the largest insurance sector companies in Libya in terms of capital and trading volume in the Libyan capital market, and the oldest established, and these companies are: Libya Insurance Company, United Insurance Company, Sahara Insurance Company.

The study showed a set of results, the most important of which is that the insurance companies under study suffer from financial failure "Altman" The rate is to predict the failure of the insurance companies under study.

The study recommended a set of recommendations, the most important of which is urging the Insurance Supervision and Control Authority to conduct courses for the administrative board of insurance companies to educate them about the concept of default and models for predicting financial failure.