Using the Sherrod model as an early warning to predict the financial failure of a sample of insurance companies listed on the Iraqi Stock Exchange for the period from (2018-2021) an Analytical study

Abstract

The research aimed to be able to predict financial failure in insurance companies listed on the Iraq Stock Exchange, relying on the (Sherrod) model to estimate the (Z-Scour) for the period from (2018-2021). The research reached the possibility of relying on the (Sherrod) model for the companies in the research sample. As an early warning to predict financial failure, as the research sample companies were classified according to the categories of the model used, Dar Al Salam Insurance Company achieved the highest value of the (Z-Scour) index during the research period (61.33), then Al-Khaleej Company, where the average value of (Z) reached (36.33). ), then Al-Hamra Insurance Company (25.93), meaning that these companies are not exposed to the risks of financial failure according to the classification of the (Sherrod) model. This expresses the efficiency of the management of these companies in managing the exploitation of their funds. There is a slight possibility that the company will be exposed to the risks of financial failure. The average value reached ( Z) for Al-Amin Insurance Company (22.53) during the research period, while the average value of (Z) for Al-Ahlia Insurance Company was (19.38), which is the lowest among the arithmetic circles. At the sector level, the insurance sector companies in the research sample achieved a value for (Z-Scour) in In 2018, it reached (43.38), but it was reduced to (26.18) in 2020. The research recommends spreading awareness among companies listed in the market about the phenomenon of financial failure and prevention mechanisms through holding conferences, seminars, and workshops to clarify these mechanisms to diagnose problems and the reasons that lead to the exacerbation of the phenomenon of failure. Financial failure and finding mechanisms to address them, the necessity of applying financial failure models, including the Sherrod model, by the management of companies listed in the Iraqi Stock Exchange market, to identify financial imbalances and weaknesses and take appropriate measures early, to avoid the occurrence of financial crises and help borrowers to take Decisions related to granting loans.