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The Effects of Individual and Economic Risks and Stress Testing of Non-Life Sector Profitability: The Case of the NorthMacedonian Insurance Sector

Jordan Kjosevski (), Mihail Petkovski () and Kiril Simeonovski ()
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Jordan Kjosevski: Corresponding author. Bank officer in Silk Roud Bank.
Mihail Petkovski: Faculty of Economics, University Ss. Cyril and Methodius in Skopje.
Kiril Simeonovski: Independent Scholar. He is Ph.D student and currently working at Ministry of Finance.

Journal for Economic Forecasting, 2022, issue 2, 125-144

Abstract: The aim of this paper is twofold. First, we explore the effects of individual and economic risks on profitability using five methods for a panel of 11 NorthMacedonian non-life insurance companies from 2009:Q1 to 2018:Q4. The results indicate that liquidated damages in gross written premiums, market concentration and GDP growth significantly affect the profitability of the NorthMacedonian insurance sector. Second, we conduct stress testing for the whole NorthMacedonian non-life insurance sector. The results show that the shock of liquidated damages in gross written premiums has the largest negative impact on the NorthMacedonian insurance sector profitability.

Keywords: non-life insurance; panel data; stress test; profitability (search for similar items in EconPapers)
JEL-codes: C23 G22 (search for similar items in EconPapers)
Date: 2022
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Handle: RePEc:rjr:romjef:v::y:2022:i:2:p:125-144