The efficiency measurement of the insurance companies as institutional investors in Turkey's capital market using data envelopment analysis

In developed economies, insurance companies transfer big amount of funds to the capital markets and so they give the power to the economies to develop. Because of that, not only the sector must be developed in a country but also insurance companies? behaviours must be appropriate while directing their earnings to the investments. In this study it is aimed that, how much the insurance companies in Turkey perform these functions that are defined above, will be determined and to transfer much more funds to the capital markets and to be more efficient in this case, the required betterments that insurance companies should apply will be found out. To reach the aim of this study, firstly the importance of institutional investors in capital markets, the status of the insurance sector in the capital markets as an institutional investor and the status of the sector in Turkey and in the world have been researched. To understand all of these better, capital market, institutional investor concepts and the insurance sector have been discussed with their important properties. The relative efficiencies of the insurance companies that were active in Turkey, in 2005, have been measured using data envelopment analysis and the results of the analysis have been discussed. The insurance companies have been analyzed in respect of their main activities and their efficiencies in the capital market as institutional investors. It have been found out that, few companies are relatively efficient in both of the cases. Modifications and betterments that are required to change the result and to make it better have been expressed in this study. Also what kind of changes should be done to produce a determined amount of output without wasting sources and to reach to the efficient frontier have been written in the related sections. It is expected that this study will be a helpful source for giving more importance to the economic functions of the insurance sector, for being able to do whatever necessary about developing in transfering funds to the capital markets and so giving more help to the economy. Keywords : Capital Market, Institutional Investor, Insurance Sector, Efficiency, Data Envelopment Analysis