Underwriting Concentration and Its Relationship with Financial Stability Indicators in Egyptian Insurance Companies: An Empirical Study Using Panel Data

This study examines the relationship between underwriting concentration and financial stability indicators in Egyptian conventional property and liability insurance companies. Using a balanced panel of 17 insurers over 2020–2024 (85 firm-year observations), underwriting concentration is measured using the Herfindahl–Hirschman Index (HHI) based on written premiums across insurance lines. Financial stability is assessed using seven indicators covering profitability (ROA and ROE), liquidity (Current Ratio and Cash Ratio), and solvency/financial structure (D/E, TD/TA, and SER). Separate panel regressions are estimated using Pooled OLS, Fixed Effects, or Random Effects, as determined by specification tests. The HHI coefficient is negative for six of the seven outcomes. Under the conventional unadjusted 5% criterion, HHI is negatively associated with ROE (β = −0.0000219, p = 0.0238), while the associations with the other six indicators are not statistically significant. However, the ROE result does not remain significant under a Bonferroni adjustment for the seven HHI tests (adjusted threshold α = 0.0071). Overall, the findings do not provide robust evidence of a systematic relationship between underwriting concentration and the financial stability indicators examined, although the unadjusted ROE result provides suggestive evidence warranting further investigation.