The Use Of The Multivariate Statistical Methods In The Performance Analysis Of Non-Life Insurance Companies

Year 2018, Volume: 10 Issue: 18, 56 - 69, 01.01.2018

Övgücan Karadağ Erdemir , Hüseyin Tatlıdil

https://doi.org/10.14784/marufacd.460659

Abstract

Multivariate statistical methods have been used for performance analysis in recent years. Performance
of companies in insurance sector, which is one of the important service industry, can be evaluated using
multivariate statistical methods. In the present study, the performance of 30 non-life insurance companies
operating in Turkey between 2010 and 2014 are analyzed by multivariate statistical methods such as Principal
Component Analysis (PCA) and Multidimensional Scaling (MDS). Using the data in “Insurance and
Private Pensions Reports” which are published by Republic of Turkey Prime Ministry Undersecretariat of
Treasury Insurance Auditing Board at the end of each year, PCA and MDS analyzes are conducted. First
PCA is carried out for each year then using the results of PCA, score values are calculated and insurance
companies are ranked by these scores. Results of ranking are supported by rank correlation matrix. Performance
of non-life insurance companies is investigated on the plane using MDS. Results of PCA, rank correlation
and MDS are compared and interpreted.

Keywords

Non-Life Insurance Companies, Financial Performance, Principal Component Analysis, Rank Correlation, Multidimensional Scaling

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