G2 - Financial Institutions and ServicesReturn

The aim of the article is to determine and verify the key indicators of the assessment of the level of management of non-life insurance companies by applying multi-criteria decomposition methods. The specific indicators considered include standard financial analysis indicators (equity ratio, total debt ratio, return on equity indicator and return on assets), specific financial indicators of insurance companies (claims ratio, capital adequacy ratio, technical adequacy ratio, solvency ratio indicator and more) and indicators that are used to analyze the level of the insurance market (gross premiums written, net premiums earned and number of insurance contracts concluded). Firstly, multicriteria decomposition methods are described: analytical hierarchical process and analytical network process. Both approaches are described including the calculation procedure. Subsequently, they are applied in determining the preferences of indicators of the assessment of the level of management of insurance companies. Our results show the resulting preferences of individual indicators for assessing the level of performance of non-life insurance companies and key indicators. The most important indicators that can be described as the key indicators with a high preference are return on equity indicator, gross premiums written, return on assets, claims ratio and solvency ratio indicator.

This paper examines whether Borsa Istanbul (BIST) 100 index returns as well as individual stock returns are normally distributed and whether return distributions approach normal for longer return periods. Data include the daily aggregate market returns, i.e., BIST-100 index returns, and 9 firms' daily returns in 3 sectors, i.e. banking, automotive and holding. Data period is from 2004 to 2018Q1. Three types of normality tests, Shapiro-Wilk, Jarque-Bera and Kolmogorov-Smirnow were applied. The results showed that returns seemed to have leptokurtic distribution instead of normal distribution and as the return period increases, distribution of returns approached normal. This suggests that investors should not rely on the normality of returns assumption while evaluating risk for shorter return periods.

This article deals with the financial stability under conditions of the current economic system, focusing on more detailed analysis of the Czech Republic by using specific indicators of the financial stability in the context of the global situation affected by the financial crisis. The first and second part of the paper will provide a brief overview of the evolution of economic thought to the present, trying to bring the most realistic and objective critical assessment of the current economic system. A practical example of the financial stability analysis will be shown on the case of the Czech Republic in the third section. Through selected indicators of financial stability, the overall health of the financial sector will be assessed. This will be examined for the period from 2006 to 2011, partly in 2012, taking into consideration the development of global economic situation. Although the overall financial stability in the Czech Republic may seem stable, further development will depend substantially on the financial and economic situation in other important states. In the end, the significance of psychology in the economy and the importance of moral principles will be pointed out.