The Comparability of Financial Information in Insurance Companies Using NiCE Qualitative Characteristics Measurement

Magdalena Chmielowiec-Lewczuk (), Marzanna Lament, Kinga Bauer and Ewa Spigarska
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Magdalena Chmielowiec-Lewczuk: Department of Insurance, Wroclaw University of Economics and Business, 53-345 Wroclaw, Poland
Marzanna Lament: Department of Finance, Insurance and Accounting, Casimir Pulaski Radom University, 26-600 Radom, Poland
Kinga Bauer: Department of Accounting, Cracow University of Economics, 31-510 Cracow, Poland
Ewa Spigarska: Department of Accounting, University of Gdansk, 80-309 Gdańsk, Poland

Sustainability, 2023, vol. 15, issue 20, 1-17

Abstract: The purpose of this article is to assess the comparability of financial information presented in the annual statements of insurance companies by means of the NiCE (Nijmegen Centre for Economics) index of financial report quality assessment and suggest some directions for changes to the assessment of comparability of insurance companies’ financial reporting. The selection of cases for the research sample was intentional. Financial reports were chosen from 8 insurance companies, whose share measured by the value of their assets accounts for more than 30% of the EU market. Financial statements for three years (2019, 2020, 2021) were obtained and assessed in each case. The NiCE index of financial report quality assessment was used, and utilised first to assess the qualitative characteristics of financial reporting from entities other than financial institutions. The study found a high comparability in insurance companies’ financial reporting. It was also established that the method of assessment is not free from defects, and some improvements were suggested. The results could serve insurance company stakeholders by indicating the current state and some directions for change regarding the comparability of financial statements. The stakeholders require reliable data, mainly regarding the goals on Agenda 2030. Understanding and analysing sustainability goals for entities such as insurance companies without analysing their financial situation is impossible. This research improves the state of the art in the assessment of financial reporting quality and fills a gap in the verification of the comparability of insurance companies’ financial information. The research undertaken should also be considered important from the point of view of sustainability, as the quality of information is an important element in decision-making and forms the basis for the preparation of non-financial information and ESG (environment, social, governance) reports.

Keywords: insurance companies; financial reporting; comparability of financial statements; qualitative characteristics of financial statements; NiCE index (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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