Analysis of the Financial Stability of the Iranian Insurance Industry

Document Type : Research Paper

Authors

1 PhD student in Economics, Islamic Azad University, Firoozkooh Branch

2 Associate Professor of Economics, Alzahra University, Tehran, Iran

3 Associate Professor, Department of Economics, Firoozkooh Branch, Islamic Azad University

4 Assistant Professor, Department of Economics, Faculty of Social and Economic Sciences, Al-Zahra University, Tehran, Iran

Abstract

The occurrence of the financial crises and increasing concerns about existing inequalities have led to the introduction of financial stability sub-indicators by international institutions for insurance companies. The occurrence of any financial problems and the subsequent scandal, known as financial and economic bankruptcy in insurance companies, not only affects their shareholders, also affects many members of society, including insurers and other stakeholders. Since insurance industry observers need to achieve an efficient tool to study and identify the internal challenges of the country's insurance industry, and in the meantime, one-dimensional indicators do not have the necessary strength to express the effects of such challenges, the purpose of this article is to calculate the combined financial stability index for the insurance industry according to the statistics and information between 2006 to 2018 of insurance companies. The combined index of financial stability has been calculated using 27 sub-indices from the theoretical and experimental literature and the principal components method. The results show that in the long run, the insurance industry is facing a downward trend in financial stability, but in the short run, it is fluctuating. The long-term downward trend of the financial stability index indicates the critical situation of the insurance industry.

Keywords

References

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Financial Management Strategy
Volume 9, Issue 4 - Serial Number 35
December 2021
Pages 107-130

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History

  • Receive Date: 06 July 2021
  • Revise Date: 23 August 2021
  • Accept Date: 27 December 2021

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