IS THERE A CAUSAL RELATIONSHIP BETWEEN FINANCIAL PERFORMANCE AND PREMIUM PRODUCTION? EVIDENCE FROM TURKISH INSURANCE INDUSTRY

Özcan Işık; Mohsin Shabir; Murat Belke

Article Details

IS THERE A CAUSAL RELATIONSHIP BETWEEN FINANCIAL PERFORMANCE AND PREMIUM PRODUCTION? EVIDENCE FROM TURKISH INSURANCE INDUSTRY

Authors:

Özcan Işık | Mohsin Shabir | Murat Belke

Publisher:

Burdur Mehmet Akif Ersoy University

Main Topics:

Econometric and Statistical Methods

Journal:

Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.10 Issue 2, pp.1388-1412

Document Type:

Article

Publication Date:

2/2023

Document Language:

English

Document ID (Org No.):

2001293747

pISSN:

2149-1658

Keywords:

Abstract:

 This study aims at determining the causal link between financial performance and premium production of non-life insurance companies. The relation between the financial performance and premium production is explored employing data from the 2011-2019 period for eight Turkish non-life insurance companies. In the first stage of the analysis, a hybrid model including LOPCOW, SWARA II, and MARCOS methods is proposed to determine companies financial performance values. In this stage, a novel integrated weighting method for calculating criterion weights is applied based on objective information and judgements of decision-makers. In the second stage, the association between financial performance and premium production is investigated by correlation analysis. In the last stage, the causality linkage between the two variables is estimated using a panel causality test developed by Dumitrescu and Hurlin 2012. According to the results obtained from the panel causality test, the bidirectional causality relation exists between financial performance and premium production. Besides, the individual panel causality results reveal that bidirectional causality is valid for only Allianz and Anadolu insurance companies, which had an average share of over 35 in total non-life premium production during the analysis period. The paper provides fresh evidence on the association between the financial performance and premium production, particularly from the Turkish context.

 This study aims at determining the causal link between financial performance and premium production of non-life insurance companies. The relation between the financial performance and premium production is explored employing data from the 2011-2019 period for eight Turkish non-life insurance companies. In the first stage of the analysis, a hybrid model including LOPCOW, SWARA II, and MARCOS methods is proposed to determine companies financial performance values. In this stage, a novel integrated weighting method for calculating criterion weights is applied based on objective information and judgements of decision-makers. In the second stage, the association between financial performance and premium production is investigated by correlation analysis. In the last stage, the causality linkage between the two variables is estimated using a panel causality test developed by Dumitrescu and Hurlin 2012. According to the results obtained from the panel causality test, the bidirectional causality relation exists between financial performance and premium production. Besides, the individual panel causality results reveal that bidirectional causality is valid for only Allianz and Anadolu insurance companies, which had an average share of over 35 in total non-life premium production during the analysis period. The paper provides fresh evidence on the association between the financial performance and premium production, particularly from the Turkish context.

 This study aims at determining the causal link between financial performance and premium production of non-life insurance companies. The relation between the financial performance and premium production is explored employing data from the 2011-2019 period for eight Turkish non-life insurance companies. In the first stage of the analysis, a hybrid model including LOPCOW, SWARA II, and MARCOS methods is proposed to determine companies financial performance values. In this stage, a novel integrated weighting method for calculating criterion weights is applied based on objective information and judgements of decision-makers. In the second stage, the association between financial performance and premium production is investigated by correlation analysis. In the last stage, the causality linkage between the two variables is estimated using a panel causality test developed by Dumitrescu and Hurlin 2012. According to the results obtained from the panel causality test, the bidirectional causality relation exists between financial performance and premium production. Besides, the individual panel causality results reveal that bidirectional causality is valid for only Allianz and Anadolu insurance companies, which had an average share of over 35 in total non-life premium production during the analysis period. The paper provides fresh evidence on the association between the financial performance and premium production, particularly from the Turkish context.

 Bu çalışma, hayat dışı sigorta şirketlerinin finansal performansı ile prim üretimi arasındaki nedensellik ilişkisini belirlemeyi amaçlamaktadır. Finansal performans ile prim üretimi arasındaki ilişki, sekiz Türk hayat dışı sigorta şirketi için 2011-2019 dönemi verileri kullanılarak incelenmiştir. Analizin ilk aşamasında şirketlerin finansal performans değerlerinin belirlenmesi için LOPCOW, SWARA II ve MARCOS yöntemlerini içeren hibrit bir model önerilmiştir. Bu aşamada, objektif bilgilere ve uzman komitesinin sübjektif yorumlarına dayalı olarak kriter ağırlıklarını hesaplamak için yeni bir entegre ağırlıklandırma yöntemi uygulanmıştır. İkinci aşamada ise finansal performans ile prim üretimi arasındaki ilişki korelasyon analizi ile araştırılmıştır. Son aşamada, iki değişken arasındaki nedensellik ilişkisi, Dumitrescu ve Hurlin 2012 tarafından geliştirilen bir panel nedensellik testi kullanılarak tahmin edilmiştir. Panel nedensellik testinden elde edilen sonuçlara göre finansal performans ile prim üretimi arasında çift yönlü nedensellik ilişkisi bulunmaktadır. Ayrıca, bireysel panel nedensellik sonuçları, analiz döneminde toplam hayat dışı prim üretiminde ortalama 35in üzerinde paya sahip olan Allianz ve Anadolu sigorta şirketleri için çift yönlü nedenselliğin geçerli olduğunu ortaya koymaktadır. Bu makale özellikle Türkiye bağlamında finansal performans ile prim üretimi arasındaki ilişkiye dair yeni kanıtlar sunmaktadır.

Article Details

IS THERE A CAUSAL RELATIONSHIP BETWEEN FINANCIAL PERFORMANCE AND PREMIUM PRODUCTION? EVIDENCE FROM TURKISH INSURANCE INDUSTRY

Authors:

Özcan Işık | Mohsin Shabir | Murat Belke

Publisher:

Burdur Mehmet Akif Ersoy University

Main Topics:

Econometric and Statistical Methods

Journal:

Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.10 Issue 2, pp.1388-1412

Document Type:

Article

Publication Date:

2/2023

Document Language:

English

Document ID (Org No.):

2001293747

pISSN:

2149-1658

Insurance

Financial Performance

Premium Production

LOPCOW

SWARA II

MARCOS

Panel Causality.Sigorta

Finansal Performans

Prim Üretimi

LOPCOW

SWARA II

MARCOS

Panel Nedensellik.

Issues

Article Details

Authors: Özcan Işık | Mohsin Shabir | Murat Belke

Publisher: Burdur Mehmet Akif Ersoy University

Main Topics: Econometric and Statistical Methods

Journal: Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.10 Issue 2, pp.1388-1412

Document Type: Article

Publication Date: 2/2023

Document Language: English

Document ID (Org No.): 2001293747

pISSN: 2149-1658

Issues

Authors:

Özcan Işık | Mohsin Shabir | Murat Belke

Publisher:

Burdur Mehmet Akif Ersoy University

Main Topics:

Econometric and Statistical Methods

Journal:

Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty Vol.10 Issue 2, pp.1388-1412

Document Type:

Article

Publication Date:

2/2023

Document Language:

English

Document ID (Org No.):

2001293747

pISSN:

2149-1658