Financial performance analysis of insurance companies

The levels of development are interrelated for a country's economy and its healthcare, and countries with a high level of welfare can be considered to have a developed healthcare industry. The extent of a country's investments, including hospital investments characterized by the number of hospitals, the region in which they operate and employment of healthcare personnel, is recognized as an indicator of how much priority that country gives to healthcare. In that respect, healthcare investment is a development criterion in and of itself. Other factors behind prosperity level of a country comprise maternal and infant mortality, life expectancy, rate of fatal common diseases, tobacco use, dietary habits, and obesity rates, all of which are identified as health development criteria according to the definition of the World Health Organization (WHO). Healthcare investments increase average life expectancy. On the one hand, average life expectancy increases in proportion to the living standards and the development of technology, and on the other hand, the struggle for survival continues due to the adverse environmental impacts. Private health insurance has therefore emerged as a concept to address the consequential needs and finance the remedies. There are various financing models in health insurance worldwide. As for Turkey, healthcare is under the guarantee of both the state and private insurers, with the latter offering optional services. The first part of the thesis covers health as a concept, and healthcare institutions, followed by a discussion on health policies in Turkey and across the globe, the Turkish healthcare system, a financial evaluation of healthcare institutions, cross-country comparison of health indicators identified by the World Health Organization, and health insurance. In the second part, financial performance methods of companies will be addressed; ratio analysis, parametric and non-parametric methods, data envelopment analysis -also included in the implementation of the study- will be examined in detail. The third and final part will model, through data envelopment analysis, the implementation related to the financial performance of Turkish insurance companies. The aim of this thesis is to model, for 2019 and 2021, the financial performance analysis of health insurance companies registered in the Insurance Association of Turkey. In order to assess the implications of the pandemic, which has been affecting the world since 2020, on the financial performance of the insurance companies, two periods will be examined. In this context, performance of the insurance companies selected as the decision-making units will be measured via data envelopment analysis. The respective econometric modeling will take current ratio, number of policies, equity/total assets, total fixed assets as input factors, while loss premium ratio, net profit/loss and technical provisions as output factors. Subsequent to the modeling, efficient and inefficient insurance companies will be revealed, and the actions that inefficient insurance companies must take to become efficient as well as how the pandemic affects corporate performance will be interpreted.