Selection of Financial Performance Determinants for Non-Life Insurance Companies Using Panel Data Analysis

The performances of insurance companies can be investigated using multivariate analyses where the specific financial variables are used. The results of the analysis may change according to the method and the variables used in. Widely used input and output variables can be determined through the literature review or some approaches. However, before to performance measurement, variable selection using statistical methods is important with regard to determining significant variables. In this study, determinants that measure the financial performance of 30 non-life insurance companies operating in a five-year period in Turkey are investigated by correlation analysis, regression analysis and a five-year panel data analysis. Because of inconsistency in the results of regression analysis, variables are selected according to panel data analysis. Results of panel data models based on all variables and only significant variables are compared. It is noticed that the model with financial ratios instead of transformed variables using some transformations explains the financial performance better.