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The Determinants of Financial Performance in the Romanian Insurance Market

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  • Ana-Maria Burca
  • Ghiorghe Batrinca

Abstract

The financial analysis of a company is an important tool used by actuaries in the process of decision- making on underwriting and investment activities of the insurance company. The financial performance of insurance companies is also relevant within the macroeconomic context since the insurance industry is one of the financial system’ components, fostering economic growth and stability. The financial performance of insurance companies can be analyzed at micro and macroeconomic level, being determined both by internal factors represented by specific characteristics of the company, and external factors regarding connected institutions and macroeconomic environment. This study attempts to analyze the determinants of the financial performance in the Romanian insurance market during the period 2008–2012. According to the final results achieved by applying specific panel data techniques, the determinants of the financial performance in the Romanian insurance market are the financial leverage in insurance, company size, growth of gross written premiums, underwriting risk, risk retention ratio and solvency margin.

Suggested Citation

  • Ana-Maria Burca & Ghiorghe Batrinca, 2014. "The Determinants of Financial Performance in the Romanian Insurance Market," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(1), pages 299-308, January.
    • Handle: RePEc:hur:ijaraf:v:4:y:2014:i:1:p:299-308
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    References listed on IDEAS

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    1. Shiu, Y., 2004. "Determinants of United Kingdom General Insurance Company Performance," British Actuarial Journal, Cambridge University Press, vol. 10(5), pages 1079-1110, December.
    2. M. Adams & M. Buckle, 2003. "The determinants of corporate financial performance in the Bermuda insurance market," Applied Financial Economics, Taylor & Francis Journals, vol. 13(2), pages 133-143.
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    Cited by:

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    15. Tomislava Pavic Kramaric & Marko Miletic & Ivan Pavic, 2017. "Profitability Determinants of Insurance Markets in Selected Central and Eastern European Countries," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 6(2), pages 100-123, November.
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