FINANCIAL PERFORMANCE ANALYSIS FOR NON-LIFE INSURANCE COMPANIES IN TURKEY WITH A NEW MCDM MODEL

Özet

Insurance markets have a dynamic structure and tend to grow, particularly in banking-based economies. Since the performance analysis of firms operating in the insurance market is of vital importance for lots of stakeholders, it is aimed in this work to suggest a novel multi-criteria performance evaluation model to rank and evaluate non-life insurance firms via financial indicators. The current study presents a novel hybrid multi-criteria decision-making (MCDM) framework to analyze the financial performance of non-life insurers in Turkey. The propounded approach is based on integrating two MCDM procedures: Grey decision-making trial and evaluation laboratory (DEMATEL) (GD), and Simple Ranking Process (SRP) methodologies. GD method is employed to compute the criterion weights. Afterwards, SRP is utilized to assess non-life insurance companies’ financial performance regarding defined financial criteria. Finally, sensitivity and rank reversal tests are conducted to indicate the validation of the proffered decision-making methodology. The empirical findings from the GE model indicate that premium production, is the most critical performance criteria. Allianz is the most successful company in terms of financial performance compared to other non-life insurers. The present work is the first to integrate DEMATEL under interval grey numbers and SRP approaches and apply them to gauge financial performance in the non-life insurance sector.

Abstract

Insurance markets have a dynamic structure and tend to grow, particularly in banking-based economies. Since the performance analysis of firms operating in the insurance market is of vital importance for lots of stakeholders, it is aimed in this work to suggest a novel multi-criteria performance evaluation model to rank and evaluate non-life insurance firms via financial indicators. The current study presents a novel hybrid multi-criteria decision-making (MCDM) framework to analyze the financial performance of non-life insurers in Turkey. The propounded approach is based on integrating two MCDM procedures: Grey decision-making trial and evaluation laboratory (DEMATEL) (GD), and Simple Ranking Process (SRP) methodologies. GD method is employed to compute the criterion weights. Afterwards, SRP is utilized to assess non-life insurance companies’ financial performance regarding defined financial criteria. Finally, sensitivity and rank reversal tests are conducted to indicate the validation of the proffered decision-making methodology. The empirical findings from the GE model indicate that premium production, is the most critical performance criteria. Allianz is the most successful company in terms of financial performance compared to other non-life insurers. The present work is the first to integrate DEMATEL under interval grey numbers and SRP approaches and apply them to gauge financial performance in the non-life insurance sector.

Yazarlar

Zeliha SÜT

Anahtar Kelimeler

Non-life insurance industry, Financial performance, Grey DEMATEL, SRP

JEL Codes

C69, G22

Yayın Bilgileri

Cilt 4, Sayı 2, 2024 · Sayfa 27-44

DOI: 10.52898/ijif.2024.8

Dosyalar