The main purpose of the study is to measure the effect of capital structure on financial Performance of insurance companies in Nepal. The panel least squares regression model was used to analyze the balance data of Fourteen Insurance companies for the years 2013–2020, with 126 observations. Total debt ratio, equity to total assets, firm size, liquidity ratio, and assets tangibility are independent variables, and return on asset (ROA) is a dependent variable. The necessary data are collected from the annual report of sample Insurance, Insurance and financial statistics, and the Insurance supervision report published by the Central Bank of Nepal. The data were analyzed using pooled OLS model, random effect model and fixed effect model This study has used a descriptive and causal comparative research design. Similarly, Eviews-12 computer software has been employed for diagnosis, model fit, and analysis of data. Likewise, descriptive statistics, Pearson' s correlation analysis, and multiple regression models have been used in the study. The random effect model was taken as fitted models after the model diagnosis using Eviews-12 computer software. The regression model revealed that TDR has a negative and statistically significant impact on ROA, whereas ETTA has a positive and statistically significant impact on ROA. However, Firm size has a positive and statistically insignificant impact on ROA. The insignificant Assets tangibility result indicates that the Assets tangibility cannot be considered a significant variable for Insurance performance. So, a strong Insurance companies and a wide Financial Performance increase the profitability of the Insurance. The result concluded that equity to total assets, leverage, and assets tangibility has effects the financial performance in Nepalese insurance companies' cases.