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2020•DergiPark (Istanbul University)Requires access

Determinants of Non-Life Insurer Profitability in Turkey

Abdurrahman Özen, Erhan Çankal

Open publisher page 8 citations

Abstract

Profitability is important for insurance companies as it is indicator of whether they are able to continue their activities and fulfill their obligations to policyholders. The aim of this study is to find out most important firm-specific and macroeconomic variables affecting profitability of non-life insurance companies in Turkey. The study for non-life insurance companies covers the period between 2006 and 2017 for 21 companies. ROA is used as measure of profitability. According to the fixed effects panel data model results: there is statistically significant positive relationship with size, liquidity, investment yield, age, GDP growth rate, interest rate and profitability while there is negative relationship with premium growth rate, loss ratio, leverage ratio, solvency and profitability.

About this research paper

What this paper is about

Profitability is important for insurance companies as it is indicator of whether they are able to continue their activities and fulfill their obligations to policyholders. The aim of this study is to find out most important firm-specific and macroeconomic variables affecting profitability of non-life insurance companies in Turkey. The study for non-life insurance companies covers the period between 2006 and 2017 for 21 companies. ROA is used as measure of profitability. According to the fixed effects panel data model results: there is statistically significant positive relationship with size, liquidity, investment yield, age, GDP growth rate, interest rate and profitability while there is negative relationship with premium growth rate, loss ratio, leverage ratio, solvency and profitability.

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OpenAlex reports 8 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

Profitability is important for insurance companies as it is indicator of whether they are able to continue their activities and fulfill their obligations to policyholders. The aim of this study is to find out most important firm-specific and macroeconomic variables affecting profitability of non-life insurance companies in Turkey. The study for non-life insurance companies covers the period between 2006 and 2017 for 21 companies. ROA is used as measure of profitability. According to the fixed effects panel data model results: there is statistically significant positive relationship with size, liquidity, investment yield, age, GDP growth rate, interest rate and profitability while there is negative relationship with premium growth rate, loss ratio, leverage ratio, solvency and profitability.

Key concepts: Profitability index, Solvency, Leverage (statistics), Panel data, Life insurance, Business, Market liquidity, Investment (military)

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