Financial Technology in Moderating Influence Firm Size, Risk-Based Capital, Current Ratio, and Premium Growth Ratio to Financial Performance (Study on Sharia Insurance Companies in Indonesia in the period 2017-2021)

2017-2021


INTRODUCTION
Historically, the establishment of Islamic insurance in Indonesia three years before the formation of Tafakul Indonesia and grew after the inauguration of Bank Muamalat in 1991 (Puspitasari, 2015).The development of sharia insurance in recent years in Indonesia has been quite good (Munawaroh & Mukhhidad, 2019).Sharia insurance is developing positively because most of Indonesia's population is 87% Muslim (Hakim & Asiyah, 2020).Therefore Islamic insurance has good potential to improve the economy in this country, especially the Islamic economy.
Source: Financial Services Authority 2022 Quarter II

Figure 1 Sharia General Insurance Performance Quarter II
The table above shows developments in the value of Assets, Gross Contribution, Investment, GDP, Population, Penetration, and Density.This shows an increasing trend in Sharia General Insurance Performance in the second quarter.However, it can also be found that there is a decrease in Gross Claims and also Investment Returns.From the table above, it can be seen that there is an increase in the Gross Contribution and Gross Claim accounts.Meanwhile, accounts such as Assets, Investments, and Investment Results decreased.So there is a downward trend in the Performance of Sharia Reinsurance in the second quarter.So from the two tables above, there is an increasing trend in the Performance of Sharia General Insurance, while in the Performance of Sharia Reinsurance, there is a decreasing trend.To assist in developing Islamic insurance companies, every company must strive to improve every financial performance.Amani & Sukmaningrum (2019) Explain that company growth and development can measure and assess all success in achieving profits by analyzing and evaluating financial reports.As explained in the Global Islamic Economy Indicator Report 2020/2021, it is known that Islamic financial assets globally have shown a positive upward trend in the last five years.In fact, until 2019, Islamic financial assets had reached USD 2.88 trillion and are projected to continue to increase to USD 3.69 trillion in 2024.However, the Covid pandemic has impacted Islamic insurance, from decreasing assets to increasing gross contributions.This impact is not only due to Covid but other factors such as conventional insurance, governance structures, and many more (Alsakinah & Fasa, 2022).Islamic insurance, as one of the pillars of the economy, requires good financial performance (Hasanatina et al ., 2021).Financial Performance stability will impact the company in utilizing its resources.The company is said to be healthy if it can maintain and maintain financial performance (Almajali et al ., 2012).Therefore, it is essential to maintain financial performance in insurance for the company's sustainability to maintain it well.

Literature Review Financial Technology
Financial Technology, or Fintech, refers to innovation in financial services using technological sophistication in today's modern era.This was stated by (Chrismastianto, 2017).FinTech sharia is a service and a financial solution used by technology companies or fintech start-ups based on Islamic laws (Syariah) (Komala & Lestari, 2020)

Firm Size
Brigham & Houston (2010:4) and Agnewiranti (2020) said that firm size or company size could be interpreted as the size of the company seen in equity, sales, and asset values that act as context variables that regulate the demands for services or products produced by a company (Muharramah et al ., 2021).

Risk-Based Capital
According to Denovis (2022) and Sensi (2006), risk-based capital is a way to measure the soundness of an insurance company in terms of solvency to ensure insurance obligations with the Ratio of Working Capital to the risk borne.Based on the Regulation of the Minister of Finance of the Republic of Indonesia Number 53/PMK.010/2012, it says that the target level of solvency that an insurance company must have is a minimum of 120% of the minimum risk-based Capital (Supriyono, 2019)

Current Ratio
Current ratio according to Asmirantho (2013), Kasmir (2016), and Permatasari & Yuniarti (2021), current ratio, namely a ratio of liquidity ratios which has the aim of knowing the extent to which a company can pay short-term obligations which are approaching maturity using assets smoothly (Salsabila & Miranti, 2021)

Premium Growth Ratio
According to (Agustin et al ., 2018) premium growth ratio represents an increase and decrease in the volume of net premiums, which indicates a lack of stability in the level of activity of insurance companies.When premium growth is high, profitability rises, so if profitability rises, the company's quality will be good, and the source of investment will be even more significant (Fadila & Novianti, 2017).

Financial Performance
Financial performance describes the company's success in achieving activities aimed at complying with financial implementation regulations (Dewantara et al ., 2019) (Bahril & Maulayati, 2020).In sharia insurance, it can usually be presented in proxies, not premium earned, underwriting profit, annual turnover, return on investment, return on assets, and return on equity (Greene & Segal, 2004).Therefore the financial performance used in this study is the return on assets (ROA).Because ROA can evaluate how well a company uses the funds provided (Astuti et al., 2021).

METHODS
This study uses Tambunan's secondary, panel, and quantitative data Tambunan (2021).This data can be accessed through the website of each sharia insurance company registered with the Indonesian Sharia Insurance Association (AASI) for the 2017-2021 period.Current research uses a purposive sampling method.The population used is all sharia insurance companies registered with AASI, while the sampling criteria are: 1. Listings in the 2017-2021 research period; 2. Have financial reports; 3.There is a ratio needed in research.So that there are 39 companies taken in this study.The method used is multiple linear analysis, model feasibility test (F test), hypothesis test (t-test), and coefficient of determination test.

Sampling Criteria
Total Sharia insurance company registered with AASI 2017-2021 Companies that do not report a complete financial report for 2017-2021 Companies that do not have the ratio needed by researchers The number of companies that are sampled Number of companies processed = 39x 5 years 54 (8) (7) 39 195 Source: processed data Source: processed data Table 2 explains thar based on the tests conducted, the researchers used the random effect model as the selected test.So the regression equation is as follows: ROA = -0.061950+ 0.007111X1 + 0.001078X2 -0.006638X3 + 0.000948X4 -0.001088X1Z -0.0001122X2Z + 0.000901X3Z -0.000129X4Z + e.While Table 3 explains that a simultaneous test (F test) was conducted to determine the effect of firm size, risk-based Capital, Current Ratio, and premium growth ratio on ROA so that the f test can measure the effect of the independent variable on the dependent variable.Table 7 The results of the table data above show that the Prob.0.00576, which means <0.05.So the independent variables simultaneously affect the dependent variable.Source: processed data Table 4 shows that hypotheses 1, 2, 4, 6, and 8 are rejected.It can be stated that X1, X2, X4, X2Z, and X8Z cannot affect financial performance.Moreover, hypotheses 3, 5, and 7 show that X3, X6, and X3Z can affect financial performance.While Table 5 explains that R-squared value is 0.0144012, or the equivalent of 14.4%, which means that the independent variable affects the dependent variable by 14.4%, and other factors influence the remaining 85.6%.Source: processed data

Effect of Firm Size on Financial Performance
Adhering to the research results that researchers have carried out shows that firm size does not significantly affect financial performance (ROA).The results of this study support research (Munawaroh & Mukhhidad, 2019).

Effect of Risk-Based Capital (RBC) on Financial Performance
The soundness level of an insurance company seen from the RBC level with an achievement ratio of 120% does not significantly affect ROA.Moreover, these results are supported by research by Permatasari & Yuniarti (2021).The resulting RBC ratio does not affect ROA.This illustrates that RBC's achievement level is separate from the company's efficiency in managing assets on debt.

Effect of Current Ratio (CR) on Financial Performance
Insurance company liquidity is a commitment to policyholders to pay current liabilities (debt).The results of this study on liquidity calculated by CR are affecting ROA significantly negatively.Stephanie & Ruslim (2021) also supports research at this stage.CR affects ROA.As for the results, the company can pay its current liabilities.

Effect of Premium Growth Ratio (PGR) on Financial Performance
The size of the premium earned at an insurance company can be calculated using the PGR.This study resulted in no significant positive effect on ROA.So it is the same as research from Stephanie & Ruslim (2021), Fadila &Novianti (2017), andRafi &Syaichu (2019).PGR does not have a positive effect on ROA.Therefore the company must maintain its financial position in economic and industrial growth.

The influence of Financial Technology in moderating Firm Size on Financial Performance
The results show that Fintech can moderate the effect of firm size on financial performance.So that it can strengthen the influence of Firm Size in improving financial performance, this research is also supported by Muzdalifa et al. (2018).Financial service technology facilities will provide a lot of information exchange, such as financial inclusion.The influence of Financial Technology in moderating Risk-Based Capital (RBC) on Financial Performance.

The influence of Financial Technology in moderating Risk-Based Capital (RBC) on Financial Performance
FinTech in this study results that cannot play a role in the moderating variable on the effect of RBC on financial performance.So that these factors will weaken the influence of RBC on ROA, its position as a predictor makes Fintech unable to support open access to financial information in knowing the financial health condition of an insurance company (Irmawati et al., 2022).

The influence of Financial Technology in moderating the Current Ratio (CR) on Financial Performance
Research between FinTechs in moderating CR to ROA states that it can act as a moderating variable.So that it can strengthen the effect of CR on financial performance in a positive and significant way in the allocation of good funds, the supporters of the research are Wardani & Darmawan (2020) that business actors can apply Fintech, which will increase financial literacy so that it is easy to understand finance.
Source: Financial Services Authority 2022 Quarter II Figure 2 Quarterly Sharia Reinsurance Performance II So in practice Fintech, sharia must comply with economic principles in the teachings of Islam, which are also regulated in the DSN-MUI fatwa, namely fatwa No: 117/DSN-MUI/II/2018 concerning Information Technology-Based Financing Services Based on Sharia Principles of the Indonesian Indonesian Ulema Council (2018).Ln measures Fintech [non-interest operating costs] (Uddin et al., 2020).