The Determinants of Financial Performance in the Romanian Insurance Market

Abstract

The financial analysis of a company is an important tool used by actuaries in the process

Profitability Determinants of Insurance Markets in Selected Central and Eastern European Countries

“…However, since reinsurance involves a certain cost, negative influence of this variable on profitability is expected. Such expectation is proven by research by Burca and Batrînca (2014) and Lee (2014). As stated by Lee (2014) it is consistent with a view that insurers with higher reinsurance dependence tend to have a lower level of firm profitability.…”

“…This holds for both dependent variables. Burca and Batrînca (2014) analysed the determinants of financial performance in the Romanian insurance market on the sample of 21 insurance companies during the period 2008-2012. Return on assets was employed in the model as the dependent variable while 13 explanatory variables (including firm-specific, industry-specific and macroeconomic variables) were tested using the multiple regression analysis.…”

“…Moreover, as stated by Burca and Batrînca (2014), profit attracts investors and improves the level of solvency, and thus, strengthens consumers' confidence. Furthermore, profit plays an essential role in persuading policyholders and shareholders to supply funds into insurance firms.…”

“…Over the time, a number of papers dealing with insurance companies' profitability in emerging markets, has been produced e.g. Kozak (2011), Burca and Batrînca (2014) and Őner Kaya (2015) to name a few. However, there is still no consensus on what insurance companies' profitability determinants are.…”

The Effects of Firm-Specific Factors on the Profitability of Non-Life Insurance Companies in Turkey

“…Results also suggest that there is no significant relationship between the age of the company and ROA. Burca and Batrînca [9] have investigated the factors that influence the financial performance of 21 insurance companies operating in the Romanian insurance market during the interval 2008-2012. For this purpose, 13 explanatory variables have been empirically tested: financial leverage in insurance, company size, number of years of operations in the Romanian market, growth of gross written premiums, equity, total market share, diversification, underwriting risk, investment ratio, reinsurance dependence, retained risk ratio, solvency margin, and growth of GDP/capita.…”