Volume 19, Issue 4 (12-2024)
J. Mon. Ec. 2024, 19(4): 477-496 |
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Iesvand Heidari A, Mousavi M H, Ghavidel Doostkouei S, safarzadeh E. Financial Stability of Iran's Insurance Industry:
A Multidimensional Approach. J. Mon. Ec. 2024; 19 (4) : 3
URL: http://jme.mbri.ac.ir/article-1-693-en.html
URL: http://jme.mbri.ac.ir/article-1-693-en.html
Abdolreza Iesvand Heidari1 
, Mir Hossein Mousavi *2 , Saleh Ghavidel Doostkouei3 , Esmaiel Safarzadeh2
, Mir Hossein Mousavi *2 , Saleh Ghavidel Doostkouei3 , Esmaiel Safarzadeh2
1- East Tehran Branch, Islamic Azad University, Tehran, Iran
2- Department of Economics, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran
3- Department of Economics, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran
2- Department of Economics, Faculty of Social Sciences and Economics, Alzahra University, Tehran, Iran
3- Department of Economics, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran
Abstract: (1551 Views)
Growing concerns over financial crises have prompted international organizations to introduce various sub-indices to measure financial stability (FS). In the insurance sector, financial failures and insolvency events can significantly impact stakeholders including policyholders, shareholders, and investors. Therefore, regulatory authorities require robust tools to monitor the financial resilience of insurance firms. This study aims to construct a multidimensional FS index for Iran’s insurance industry using annual data from 2006 to 2018. Relying on 27 theoretically and empirically grounded sub-indicators, we apply the Principal Component Analysis (PCA) method to develop a composite FS index. The results reveal a long-term downward trend in the industry's financial stability, indicating increasing systemic vulnerability. In contrast, short-term fluctuations reflect temporary responses to economic and policy shocks. Moreover, capital market reactions appear to align with changes in the FS index, suggesting that the index has predictive value for investor behavior.
Article number: 3
Keywords: Financial stability, Finncial Health, Insurance Industry, principal component analysis, Market Value
Type of Study: Original Research - Empirical |
Subject:
Microeconomics
Received: 29 Apr 2025 | Accepted: 20 Jul 2025 | Published: 6 Aug 2025
Received: 29 Apr 2025 | Accepted: 20 Jul 2025 | Published: 6 Aug 2025
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