Financial Analysis of the Insurance Sector
Chapter from the book: Kılıç, Y. & Buğan, M. F. & Bayrakdaroğlu, A. (eds.) 2023. Financial Analysis Applications in Borsa Istanbul: Sector-Based Reviews II.

Ünal Efe

Synopsis

Insurance, defined as a guarantee against possible risks that may arise in people's social lives and commercial activities, is carried out by insurance companies within the financial system. In the process of providing this financial service, insurance companies collect premiums to cover possible future damages and undertake to pay these premiums within the framework of the conditions specified in the contract in case of damage. The growth and development of insurance companies on a safe basis is only possible if they fulfill their commitments within the scope of the contract. In order to fulfill these commitments completely and on time, insurance companies must have a strong financial structure. In determining whether insurance companies have a strong financial structure, capital adequacy ratios, asset quality and liquidity ratios, activity ratios and profitability ratios are examined. It is very important to use these data effectively in closely monitoring the financial situations of insurance companies. With the help of this data, the performance of insurance companies and their areas of development, if any, can be determined, and it may be possible to prevent financial problems that may arise later by taking the necessary actions according to the data in advance. In this study, the financial structures of 6 insurance companies listed on Borsa Istanbul were examined using the ratio analysis method. As a result of the ratio analysis, the factors that caused the financial structure to weaken were determined and outputs were tried to be given to support the company's senior management on the actions that should be taken to eliminate or minimize these factors and risks.

How to cite this book

Efe, Ü. (2023). Financial Analysis of the Insurance Sector. In: Kılıç, Y. & Buğan, M. F. & Bayrakdaroğlu, A. (eds.), Financial Analysis Applications in Borsa Istanbul: Sector-Based Reviews II. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub255.c1151

License

Published

October 15, 2023

DOI