The effect of fluctuations of macroeconomic variables on the Solvency of the insurance industry in Iran

Document Type : Scientific paper

Authors

1 Assistant Professor, Department of Islamic Economics, Faculty of Economic and Administrative Sciences, Qom University

2 هیات علمی/دانشگاه قم

3 دانشجوی کارشناسی ارشد دانشگاه قم

Abstract

The aim of this thesis was to investigate the effect of fluctuations of macroeconomic variables on the solvency of the insurance industry in Iran. In this regard, the information of insurance companies has been collected during the period of 2011-2022. In order to achieve research hypotheses and test them, vector autoregression (VAR) method has been used. In this study, first, using the GARCH model, the volatility index of macroeconomic variables was extracted, then the effect of the shock of the fluctuations of macroeconomic variables on the solvency of insurance companies was investigated in the form of action-reaction diagrams. . The obtained results indicated that in most of the insurance companies used in the statistical sample, the shock of production fluctuations, exchange rate and inflation rate has led to a decrease in the solvency of the insurance company. Based on this, instability and fluctuations in macroeconomic variables lead to an increase in uncertainty in the economy, and this reduces the financial strength of the insurance company and the ability to adhere to the financial obligations of the companies. Based on this, instability and fluctuations in macroeconomic variables lead to an increase in uncertainty in the economy, and this reduces the financial strength of the insurance company and the ability to adhere to the financial obligations of the companies.

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History

  • Receive Date: 27 January 2024
  • Revise Date: 16 February 2024
  • Accept Date: 16 February 2024

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