Analysis of the Corporate Financial Performance Based on Grey PSI and Grey MARCOS Model in Turkish Insurance Sector

Abstract

The use of MCDM approaches in the insurance sector provides important information to the top management or decision maker’s authorities of insurance companies on issues such as accurate performance measurement, identification of strengths and weaknesses, optimisation of operations and improvement of strategic decisions. This, in turn, helps senior management to balance profitability and risk and contributes to the establishment of a sustainable business model. The present study aims to measure and rank corporate financial performance in the non-life insurance sector by using the Grey PSI and Grey MARCOS integrated model. For the purpose of this study, the proposed decision-making approach is applied through a case study. The case study focuses on the corporate financial performance assessment process of nine companies operating in the Turkish non-life insurance sector and consistently ranked in the top ten in terms of premium production in the period 2021-2023.In the current study, twelve financial performance indicators were identified for corporate financial performance analysis, taking into account previous studies in the literature. The importance weights of these performance criteria are calculated using the Grey PSI procedure. The Grey MARCOS method was then employed to determine the ranking of the decision alternatives. The results obtained from the Grey PSI method indicate that the net profit-to-total equity, net premiums received-to-gross premiums received and total operating expenses-to-gross premiums received are the three most significant criteria affecting the corporate financial performance of the relevant non-life insurance companies. The application of the grey MARCOS ranking method shows that Türkiye Sigorta has superior corporate financial performance for the period 2021-2023 compared to other insurance companies analysed in the study. The assessment and evaluation of corporate financial performance in the insurance sector is of critical importance for sector managers, policyholders, regulatory authorities, policymakers and other stakeholders, due to the significant benefits insurance companies provide at both micro and macroeconomic levels.