The Association between Technological Diversification and Firms’ Financial Performance in Iran’s Insurance Industry

This article focuses on the impact of technological diversification strategy on Iranian insurers’ financial performance. The study uses mixed-methods research design. The primary data associated with technological diversification are collected through a pilot study to understand what is meant by technological diversification in the insurance first. Accordingly, a questionnaire is designed and distributed among top-level managers of 31 Iranian insurers. Additionally, the financial performance data represented by return on asset (ROA) and return on equity (ROE) are collected from the insurers’ audited financial statements. Employing structural equation modelling (SEM) method enabled by SmartPLS 3 software to analyze the primary data, the study reports mixed effects of technological diversification on firms’ financial performance. More specifically, while there is no significant relationship between technological diversification and ROE of Iranian insurers, technological diversification decreases ROA of the studied firms. The findings have important theoretical and practical implications in the insurance context.