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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

Author

Listed:
  • 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.)

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.

Suggested Citation

  • Jordan KJOSEVSKI & Mihail PETKOVSKI & Kiril SIMEONOVSKI, 2022. "The Effects of Individual and Economic Risks and Stress Testing of Non-Life Sector Profitability: The Case of the NorthMacedonian Insurance Sector," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 125-144, April.
    • Handle: RePEc:rjr:romjef:v::y:2022:i:2:p:125-144
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    More about this item

    Keywords

    non-life insurance; panel data; stress test; profitability;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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