Abstract:
This study aims at determining the causal link between financial performance and
premium production of non-life insurance companies. The relation between the financial
performance and premium production is explored employing data from the 2011-2019
period for eight Turkish non-life insurance companies. In the first stage of the analysis,
a hybrid model including LOPCOW, SWARA II, and MARCOS methods is proposed
to determine companies’ financial performance values. In this stage, a novel integrated
weighting method for calculating criterion weights is applied based on objective
information and judgements of decision-makers. In the second stage, the association
between financial performance and premium production is investigated by correlation
analysis. In the last stage, the causality linkage between the two variables is estimated
using a panel causality test developed by Dumitrescu and Hurlin (2012). According to
the results obtained from the panel causality test, the bidirectional causality relation
exists between financial performance and premium production. Besides, the individual
panel causality results reveal that bidirectional causality is valid for only Allianz and
Anadolu insurance companies, which had an average share of over 35% in total non-life
premium production during the analysis period. The paper provides fresh evidence on
the association between the financial performance and premium production, particularly
from the Turkish context
