Firm Specific Factors Driving Financial Distress in LateEntrants of the Ethiopian Insurance Sector

Using Altman's z-score model, the study empirically investigates financial distress and its contributing factors in the context of Ethiopian late-entry insurance companies. Based on their year of inception and the availability of the necessary data in audited financial statements for the research period of 2019/2020-2023/2024, five of Ethiopia's eighteen insurance firms were specifically chosen as a sample, yielding a total of twenty-five observations. Altman's Z-Score EMS model was used as a stand-in for financial distress in the study, which used quantitative research methodologies to accomplish its goals. Using the regression model, it was discovered that a subset of Ethiopia's late-entrant insurance companies' financial distress was negatively impacted by profitability, liquidity, capital adequacy, and insurance age ratios in a statistically significant way. Leverage and firm size have a positive and statistically significant influence on financial distress. Profitability, liquidity, leverage, capital adequacy ratio, firm size, and insurance ages are the primary factors influencing the financial distress of a subset of Ethiopia's late-entrant insurance companies, according to the study's findings, which showed that the sampled late-entrant insurances were in the grey zone (1.1<Z<2.6).