International Journal of Banking, Risk and Insurance

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Measuring the Managerial Ability in the Insurance Companies in the Republic of North Macedonia, Croatia, Serbia, and Slovenia, and Identifying its Determinants


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1 Ss. Cyril and Methodius University in Skopje, Blvd. Goce Delchev 9V, 1000 Skopje, Macedonia, the former Yugoslav Republic of
     

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The aim of this paper is to measure the managerial ability of the insurance companies in the Republic of North Macedonia, Croatia, Serbia, and Slovenia, and to identify its determinants with the use of two-stage methodology (DEA + OLS). Our sample consists of 164 insurance-year observations and the covered period is 2016 to 2019. As insurance inputs, we use material costs, agent costs, labour costs, and capital costs, while insurance lines with similar characteristics such as personal short-tail lines, personal long-tail lines, commercial short-tail lines, and commercial long-tail lines are used as outputs. After obtaining the efficiency scores uing DEA, an OLS regression was conducted, where we find that the size, age, and personal longtail lines have a statistically significant and negative relationship with firm efficiency, while the financial leverage and personal short-tail lines show a positive and statistically significant relationship.s It has been found that size has a negative impact on the financial performance, while this association appeared positive for the capital ratio and insignificant for the managerial ability. The next OLS regression showed that CEO duality, board size, board composition, gender diversity, and CEO gender have an insignificant impact on the managerial ability, and the diversity of nationalities of the CEO revealed a positive and significant impact.

Keywords

Insurance, Relative Efficiency, Managerial Ability, DEA, OLS.
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  • Measuring the Managerial Ability in the Insurance Companies in the Republic of North Macedonia, Croatia, Serbia, and Slovenia, and Identifying its Determinants

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Authors

Violeta Cvetkoska
Ss. Cyril and Methodius University in Skopje, Blvd. Goce Delchev 9V, 1000 Skopje, Macedonia, the former Yugoslav Republic of
Ljupcho Eftimov
Ss. Cyril and Methodius University in Skopje, Blvd. Goce Delchev 9V, 1000 Skopje, Macedonia, the former Yugoslav Republic of
Igor Ivanovski
Ss. Cyril and Methodius University in Skopje, Blvd. Goce Delchev 9V, 1000 Skopje, Macedonia, the former Yugoslav Republic of
Tanja Kamenjarska
Ss. Cyril and Methodius University in Skopje, Blvd. Goce Delchev 9V, 1000 Skopje, Macedonia, the former Yugoslav Republic of

Abstract


The aim of this paper is to measure the managerial ability of the insurance companies in the Republic of North Macedonia, Croatia, Serbia, and Slovenia, and to identify its determinants with the use of two-stage methodology (DEA + OLS). Our sample consists of 164 insurance-year observations and the covered period is 2016 to 2019. As insurance inputs, we use material costs, agent costs, labour costs, and capital costs, while insurance lines with similar characteristics such as personal short-tail lines, personal long-tail lines, commercial short-tail lines, and commercial long-tail lines are used as outputs. After obtaining the efficiency scores uing DEA, an OLS regression was conducted, where we find that the size, age, and personal longtail lines have a statistically significant and negative relationship with firm efficiency, while the financial leverage and personal short-tail lines show a positive and statistically significant relationship.s It has been found that size has a negative impact on the financial performance, while this association appeared positive for the capital ratio and insignificant for the managerial ability. The next OLS regression showed that CEO duality, board size, board composition, gender diversity, and CEO gender have an insignificant impact on the managerial ability, and the diversity of nationalities of the CEO revealed a positive and significant impact.

Keywords


Insurance, Relative Efficiency, Managerial Ability, DEA, OLS.

References