Return on equity, or ROE, the ratio of a company's 12-month net income to its shareholder equity (book value), is the most widely used profitability gauge.

As a stern reminder of the importance of generating substantial underwriting profits, the 100.7 combined ratio in 2005 produced an ROE of just 10.4 percent.

From the results we can see the debt ratio, return on net assets, equity turnover ratio had a positive relationship with the explanatory variables, and this is consistent with the expected.