Abstract

Objectives: This study aimed to identify the impact of financial leverage on the financial performance indicators of insurance companies listed in the Saudi financial market, represented by return on assets and return on equity. The insurance sector was chosen for the important role that this sector plays in the Saudi economy, and the study sample consisted of all insurance companies listed on the Saudi financial market for the period 2019-2022. Methods: The study used the descriptive analytical method to achieve the objectives of the study and to analyze and interpret the data to reach conclusions and recommendations. To test the hypotheses, a simple linear regression method was used. Results: The results of the statistical analysis and testing of the hypotheses showed that there is a statistically significant effect of financial leverage on the return represented by (ROA, ROE), and that insurance companies have a high leverage rate. Conclusion: A set of recommendations were made, including the need for insurance companies to study and evaluate their financing structure with the aim of reaching the best financial leverage ratio that achieves a positive impact on financial performance indicators.