USING RATIO ANALYSIS TO ASSESS THE INSURANCE FIRMS OPERATING IN TURKEY

Abstract

Insurance appeared so as to defend individuals against the losses and the costs that will occur depending on the various conditions along with the necessity of taking precautions beforehand throughout the people’s life. In other words, insurance is a form of attitude that occurs as a result of request and wish in order to supply the needs of the individuals in the future. The financial reports of the insurance companies are different from the financial reports of the firms that operate in the commercial and industrial field. The firms in the sector, contrary to the other businesses, have to compose accounts in such a way that it also includes the details reproduced by the characteristics of the service. The characteristics of the insurance businesses that they have will also reflect on the financial reports of insurance (Karasu,1996: 20-24). These characteristics can be juxtaposed as: a-In the insurance companies, it is certainly not possible to determine the profit or the loss of the period. This is because each price of the service provided depends on a set of probability calculations. b-The technical compensations that express the cautions of the firms are reserved from the insurance premium that the insured person has paid unlike the other businesses that reserve from the benefit. c-As the technical compensations depend on a set of probability calculations, the financial reports will have a definite margin of error. Under the lights of these explanations, our study aims to assess all the insurance companies (except for the unreached firms and the life insurance branch) that operate in the country by using the ratio analysis towards the dynamic analysis within the period of seven years including the years 2000-2006, and suggests some ideas on the trend of the sector.