THE SOLVENCY MARGIN DETERMINANTS FOR MACEDONIAN INSURANCE SECTOR
The subject of this paper is to define and explore the solvency margin determinants for the Macedonian insurance sector. We use the solvency margin values as the dependent variable to model the relationship with other independent variables such as capital, losses, premium, provisions and costs. Time series VECM model is applied on the quarterly data for the presented variables for Macedonian insurance sector for the period between 1 quarter 2010 and 4 quarter 2016. The goal of this analysis is to determine the statistical significance of the relations of the solvency margin with other independent variables as capital, losses payed, premium obtained, provisions payed and administrative costs. Finding of this paper indicate that Macedonian insurance sector well positioned to risk and that Macedonian insurance companies manage risk with proper consideration.