What are the factors that determine risk-adjusted returns of Croatian life insurers?
Purpose: When conducting their business, insurers face various risks that are controlled for in order to mitigate them and protect the insured, inter alia. Moreover, being aware of the factors that determine the reward-to-risk ratio for insurers is also of crucial importance. Thus, the aim of this r...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics and Business in Osijek
2023-01-01
|
| Series: | Ekonomski Vjesnik |
| Subjects: | |
| Online Access: | https://hrcak.srce.hr/file/439867 |
| _version_ | 1797206487359029248 |
|---|---|
| author | Tomislava Pavić Kramarić Marko Miletić |
| author_facet | Tomislava Pavić Kramarić Marko Miletić |
| author_sort | Tomislava Pavić Kramarić |
| collection | DOAJ |
| description | Purpose: When conducting their business, insurers face various risks that are controlled for in order to mitigate them and protect the insured, inter alia. Moreover, being aware of the factors that determine the reward-to-risk ratio for insurers is also of crucial importance. Thus, the aim of this research is to identify potential factors that influence risk-adjusted returns of life insurance companies.
Methodology: The analysis is conducted on a sample of life insurers that operated in Croatia in the period from 2016 to 2020. For this purpose, risk-adjusted ROA, i.e. the Sharpe ratio, is used as a risk-adjusted return measure, while independent variables encompass several insurance firm-oriented and insurance industry-specific variables, as well as variables depicting the level of macroeconomic development, stock market, bond market and institutional development.
Results: After conducting dynamic panel analysis, the obtained results suggest that the premium growth rate, asset-based size, the net premium to surplus ratio, i.e. leverage, as well as bond market development are significant factors when determining risk-adjusted returns.
Conclusion: Risk-adjusted returns are determined by insurance firm-oriented factors which are important not only to investors but also to insurance market regulators and insurance firm managers. |
| first_indexed | 2024-04-24T09:07:48Z |
| format | Article |
| id | doaj.art-fd49c387da0b470c9d25591e67247a2a |
| institution | Directory Open Access Journal |
| issn | 0353-359X 1847-2206 |
| language | English |
| last_indexed | 2024-04-24T09:07:48Z |
| publishDate | 2023-01-01 |
| publisher | Faculty of Economics and Business in Osijek |
| record_format | Article |
| series | Ekonomski Vjesnik |
| spelling | doaj.art-fd49c387da0b470c9d25591e67247a2a2024-04-15T18:41:21ZengFaculty of Economics and Business in OsijekEkonomski Vjesnik0353-359X1847-22062023-01-0136120321210.51680/ev.36.1.15What are the factors that determine risk-adjusted returns of Croatian life insurers?Tomislava Pavić Kramarić0Marko Miletić1University of Split, University Department of Forensic Sciences, Split, CroatiaUniversity of Split, University Department of Professional Studies, Split, CroatiaPurpose: When conducting their business, insurers face various risks that are controlled for in order to mitigate them and protect the insured, inter alia. Moreover, being aware of the factors that determine the reward-to-risk ratio for insurers is also of crucial importance. Thus, the aim of this research is to identify potential factors that influence risk-adjusted returns of life insurance companies. Methodology: The analysis is conducted on a sample of life insurers that operated in Croatia in the period from 2016 to 2020. For this purpose, risk-adjusted ROA, i.e. the Sharpe ratio, is used as a risk-adjusted return measure, while independent variables encompass several insurance firm-oriented and insurance industry-specific variables, as well as variables depicting the level of macroeconomic development, stock market, bond market and institutional development. Results: After conducting dynamic panel analysis, the obtained results suggest that the premium growth rate, asset-based size, the net premium to surplus ratio, i.e. leverage, as well as bond market development are significant factors when determining risk-adjusted returns. Conclusion: Risk-adjusted returns are determined by insurance firm-oriented factors which are important not only to investors but also to insurance market regulators and insurance firm managers.https://hrcak.srce.hr/file/439867risk-adjusted returnslife insurersCroatia |
| spellingShingle | Tomislava Pavić Kramarić Marko Miletić What are the factors that determine risk-adjusted returns of Croatian life insurers? Ekonomski Vjesnik risk-adjusted returns life insurers Croatia |
| title | What are the factors that determine risk-adjusted returns of Croatian life insurers? |
| title_full | What are the factors that determine risk-adjusted returns of Croatian life insurers? |
| title_fullStr | What are the factors that determine risk-adjusted returns of Croatian life insurers? |
| title_full_unstemmed | What are the factors that determine risk-adjusted returns of Croatian life insurers? |
| title_short | What are the factors that determine risk-adjusted returns of Croatian life insurers? |
| title_sort | what are the factors that determine risk adjusted returns of croatian life insurers |
| topic | risk-adjusted returns life insurers Croatia |
| url | https://hrcak.srce.hr/file/439867 |
| work_keys_str_mv | AT tomislavapavickramaric whatarethefactorsthatdetermineriskadjustedreturnsofcroatianlifeinsurers AT markomiletic whatarethefactorsthatdetermineriskadjustedreturnsofcroatianlifeinsurers |