A companyâ€™s profitability has always attracted the attention of academics, policy makers andrnpractitioners, and researchers interested in revealing the main factors that determinernbusiness success or profitability. Although profitability has been widely investigated inrnindustries like manufacturing industries far less attention has been paid to financial sectorrnespecially to insurance sector. This study examined the determinants of profitabilityrn(liquidity, tangibility, volume of capital, premium growth, claim ratio, real GDP andrninflation) on general insurance companies of Ethiopia proxied by ROA. Profitability isrndependent variable while liquidity, tangibility, volume of capital, premium growth, claimrnratio, real GDP and inflation) are independent variables.rnIn this paper, econometricrnanalyses have performed for a panel of nine Ethiopian general insurance companies for thernstudy period of 2005-2014. The study has used secondary data or quantitative nature of datarnobtained from the annual audited financial statements (balance sheet and profit/loss account,rnand revenue account) of insurance companies, financial publications of NBE by applying arnstatistical package data called EVies 7 only. Since, the study data was panel data or therncombination of cross-sectional and time-series data and concurrently random-effect panelrndata regression was applied to study the effect of those selected independent variables onrnprofitability (ROA). The random effect regression result shows that tangibility, volume ofrncapital, premium growth, claim ratio, and real GDP are identified as most importantrndeterminants of profitability hence tangibility, volume of capital, premium growth arernsignificant and positively related. In contrast, claim ratio and real GDP are negatively butrnsignificantly related with profitability. However, liquidity and inflation are not significantlyrnrelated with profitability. The result implies that, company with high asset, capital, volume ofrnpremium, and with low claim incurred has more profit than the company with low assetrn(fixed asset), capital, premium growth, and high claim incurred. Hence, insurers should havernto raise their asset (fixed asset), capital, and volume of gross premium; while, insurers mustrndecrease their claim incurred in line with the rules and limits of the National Bank ofrnEthiopia in order to earn more profit.rnKey Words: Insurance Companies, Determinants, Profitability