Abstract:

The main purpose of this research is to analyze the impact of change in companies’ risk and risk based capital (RBC) ratio on the change in capital in general insurance companies in Indonesia for the period 2013-2017. Observations were made on 31 general insurance companies in Indonesia. Asset Risk and Product Risk were used as a proxy to measure company risk. The results of research show that the companies’ risk and RBC ratio in Indonesia have a significant influence on the change in capital in general insurance companies in Indonesia for the period 2013-2017. These results agree with the previous research on the same topic for general insurance and banking companies. In this study, change in companies’ risk has a positive influence and RBC ratio has a negative influence on changes in companies’ capital. That means, whenever there is an increase in risk in the company, the company will increase their capital so that the company can comply with RBC regulations and are able to cope with any risks they have.