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Financial Stability of Insurance Companies in Selected CEE Countries

Author

Listed:
  • Pavić Kramarić Tomislava

    (University of Split, University Department of Professional Studies, Split, Croatia)

  • Miletić Marko

    (University of Split, University Department of Professional Studies, Split, Croatia)

  • Kožul Blaževski Renata

    (University of Split, University Department of Professional Studies, Split, Croatia)

Abstract

Background: Financial stability or soundness of insurance companies has gained importance over the years, especially after the financial crisis of 2008. Various stakeholders such as policy makers, regulators, the insured, etc. are interested in keeping the insurance sector stable since it contributes to overall financial stability.Objectives: The authors explore the determinants of insurers’ soundness in selected countries in Central and Eastern Europe. The analysis covers life, non-life and composite insurers that operated in Croatia, Hungary, and Poland in the period 2013 – 2017.Methods/Approach: A set of insurer – specific, industry – specific and macroeconomic variables are taken into consideration for having a potential influence on soundness measured by the Z-score. The variables include the size based on total assets, the share of premium ceded to reinsurance, claims growth, gross written premium growth, the premium to surplus ratio, market shares held by the five largest insurers, the share of gross written premium in the gross domestic product (GDP) and the GDP per capita growth.Results: The findings reveal that soundness of Croatian insurers is positively influenced by the size of an insurer. Both in Hungary and Poland reinsurance plays an important factor positively affecting soundness.Conclusions: Each of the insurance markets covered by the analysis reveals its characteristics and offers guidelines on factors influencing financial stability.

Suggested Citation

  • Pavić Kramarić Tomislava & Miletić Marko & Kožul Blaževski Renata, 2019. "Financial Stability of Insurance Companies in Selected CEE Countries," Business Systems Research, Sciendo, vol. 10(2), pages 163-178, September.
    • Handle: RePEc:bit:bsrysr:v:10:y:2019:i:2:p:163-178:n:12
    DOI: 10.2478/bsrj-2019-025
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    References listed on IDEAS

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    Cited by:

    1. Ilyes Abidi & Mariem Nsaibi & Boutheina Regaieg, 2020. "Challenges of Islamic Insurance," International Journal of Economics and Financial Issues, Econjournals, vol. 10(4), pages 69-79.
    2. Cătălin Câmpeanu, 2023. "Determinants for life insurances, a view on notoriety," Journal of Financial Studies, Institute of Financial Studies, vol. 15(8), pages 29-41, November.
    3. repec:fst:rfsisf:v:8:y:2023:i:15:p:29-41 is not listed on IDEAS

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    More about this item

    Keywords

    insurance companies; soundness; Central and Eastern European countries;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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