Effects of macro-economic factors on non-life insurance sales

It is commonly argued that macro-economic factors have substantial effects on financial markets. Insurance business is an important part of an economic structure as well as a safeguard against potential risks for the better functioning of economies. Insurance can be classified as life insurance and non-life insurance according to the different economic benefits they supply to the policy holders. Objective of this study is to analyze the effects of some macro-economic factors namely, inflation rate, USD, interest rates and GDP per capita on non-life insurance sales in Turkey. First, the variables are employed separately in four different models, and then the effects of the variables are examined altogether in one model. Results of the analyses imply that the economic factors employed in the models are doing a good job in explaining the change in non-life insurance premium production, having different explanatory powers taken separately. However, inflation rates and interest rates variables are dropped out of the model as they are not statistically significant. Another major finding in this study is that the GDP per capita is directly proportional and USD is inversely proportional to the non-life insurance premium production volume. The study is further deepened by segmenting non-life insurance companies into three categories namely upper, middle and lower segments, and by employing two different matrix approaches namely, BCG Matrix and the Relative Profitability and Growth Matrix. Key words: Non-life insurance, macro-economic factors, inflation rate, USD, interest rate, GDP per capita, BCG matrix, Relative Profitability and