Research On The Bankruptcy Risk Of Romanian Insurance Companies Based On Financial Indicators From Financial Statements

The purpose of this paper is to show whether the information available to the general public, provided by the Ministry of Finance, is sufficient to form an opinion on the economic and financial background of an insurance company and whether it can protect us from the unpleasantness of taking out an insurance policy with a company that will go bankrupt in the near future. Clearly, we also aim to provide an understanding of the risks faced by insurance companies, to assess the effectiveness of regulations and supervisory bodies, and to propose solutions to prevent bankruptcies and protect future customers. In these contexts, the objectives set focus on analyzing the indicators in the annual financial statements that may or may not signal a future bankruptcy and whether this information can protect potential customers. The research methodology is based on techniques such as documentary synthesis on insurance, risk in insurance, analysis of financial statements on several indicators (solvency ratio, equity, return on equity (ROE), return on total assets (ROA), overall leverage ratio) in order to identify the risks that the main users of information provided by the financial statements of insurance companies are taking.