Analysing the Determinants of Profitability of Domestic and Foreign Non-Life Insurers in Turkey

Özet

The main goal of this study is to empirically analyze the insurance-specific, industry-specific and macroeconomic factors affecting the profitability of foreign and domestic-owned non-life insurers operating in the Turkish insurance sector over the period of 2014-2019. For this purpose, a balanced panel data of 27 non-life insurers is used in the study.
Results from the random effects model demons trate that debt ratio, premium retention ratio, listed status, and growth of total assets are significant factors that determine the profitability of domestic-owned companies. However, the factors affecting the profitability of foreign-owned insurers are company size, debt ratio, underwriting risk, premium retention ratio, listed status, and com pany age, respectively. Meanwhile, the variables such as GDP growth, inflation rate, and market concentration have a significant effect on the profitability of neither foreign nor domestic owned non-life insurers.

Abstract

The main goal of this study is to empirically analyze the insurance-specific, industry-specific and macroeconomic factors affecting the profitability of foreign and domestic-owned non-life insurers operating in the Turkish insurance sector over the period of 2014-2019. For this purpose, a balanced panel data of 27 non-life insurers is used in the study.
Results from the random effects model demons trate that debt ratio, premium retention ratio, listed status, and growth of total assets are significant factors that determine the profitability of domestic-owned companies. However, the factors affecting the profitability of foreign-owned insurers are company size, debt ratio, underwriting risk, premium retention ratio, listed status, and com pany age, respectively. Meanwhile, the variables such as GDP growth, inflation rate, and market concentration have a significant effect on the profitability of neither foreign nor domestic owned non-life insurers.

Yazarlar

Özcan IŞIK

Anahtar Kelimeler

Profitability, Insurance, Panel data, Turkey.

JEL Codes

G22, C23

Yayın Bilgileri

Cilt 1, Sayı 1, 2021 · Sayfa 44-55

DOI: 10.52898/ijif.2021.5

Dosyalar