The insurance industry, as a key institution in the financial system of any country, plays a significant role in managing risks and ensuring the financial security of individuals and businesses. This study examines the effects of fluctuations in various variables on the profitability of insurance companies over the period from 2011 to 2023 on a quarterly basis, using the Structural Vector Autoregression (SVAR) approach. The findings show that profitability, as one of the main variables, plays a critical role in explaining its own changes. The results of the variance analysis indicate that profitability, especially in the short term, is the largest factor explaining changes, accounting for about 71% of fluctuations, while this share decreases to 53% in the long term. Shocks related to financial leverage and capital adequacy ratio also significantly explain changes in profitability in both the short and long term, respectively. It is recommended that insurance companies use advanced risk analysis tools and establish stricter standards in the underwriting process to reduce unnecessary risks. Additionally, implementing intelligent risk assessment systems and adopting appropriate policies in liquidity management and investment can help improve financial performance and enhance the sustainability of companies. Striking a balance between internal and external financial resources, reducing high-risk debt, and strengthening the capital adequacy ratio will also lead to increased financial stability in the face of economic shocks.
