EJPAU 2011. Kozak S. DETERMINANTS OF PROFITABILITY OF NON-LIFE INSURANCE COMPANIES IN POLAND DURING INTEGRATION WITH THE EUROPEAN FINANCIAL SYSTEM

Electronic Journal of Polish Agricultural Universities (EJPAU) founded by all Polish Agriculture Universities presents original papers and review articles relevant to all aspects of agricultural sciences. It is target for persons working both in science and industry,regulatory agencies or teaching in agricultural sector. Covered by IFIS Publishing (Food Science and Technology Abstracts), ELSEVIER Science - Food Science and Technology Program, CAS USA (Chemical Abstracts), CABI Publishing UK and ALPSP (Association of Learned and Professional Society Publisher - full membership). Presented in the Master List of Thomson ISI.

2011
Volume 14
Issue 1

Topic:

Economics

ELECTRONIC
JOURNAL OF
POLISH
AGRICULTURAL
UNIVERSITIES

Kozak S. 2011. DETERMINANTS OF PROFITABILITY OF NON-LIFE INSURANCE COMPANIES IN POLAND DURING INTEGRATION WITH THE EUROPEAN FINANCIAL SYSTEM, EJPAU 14(1), #01.
Available Online: http://www.ejpau.media.pl/volume14/issue1/abs-01.html

DETERMINANTS OF PROFITABILITY OF NON-LIFE INSURANCE COMPANIES IN POLAND DURING INTEGRATION WITH THE EUROPEAN FINANCIAL SYSTEM

Sylwester Kozak
Faculty of Economic Sciences, Warsaw University of Life Sciences - SGGW, Poland

ABSTRACT

The integration process of the Polish financial system with the European markets significantly affected profitability of the non-life insurance sector in Poland. During this period, the level of invested capital and number of companies controlled by foreign investors has increased, as well as the share of premiums collected by these companies in the total premiums of the sector. The period of financial integration was characterized by a significant improvement of financial performance of the sector, as well as profitability of its insurance and investment activities. To check determinants of the profitability tests, were conducted on a panel of 25 non-life insurance companies for the period of 2002–2009. For estimation a regression model with elimination of the impact of heteroscedasticity and autocorrelation in the analyzed sample was used. The results indicate that the reduction in the share of motor insurance in the portfolio, with simultaneous increase of other types of insurance, has a positive impact on profitability and cost-efficiency of insurance companies. However, offering too broad spectrum of classes of insurance negatively impacts its profitability and cost efficiency. Companies improve profitability and cost efficiency with an increase of their gross premiums and decrease of total operating expenses. Additionally increases of the GDP growth and the market share of foreign owned companies positively impact profitability of non-life insurance companies during the integration period.

Key words: non-life insurance, profitability of companies, determinants of profitability, European integration.

Sylwester Kozak
Faculty of Economic Sciences, Warsaw University of Life Sciences - SGGW, Poland
161 Nowoursynowska Str., 02-787 Warsaw, Poland
email: sylwester_kozak@sggw.pl

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