Matrix forecasting to investigate the capital efficiency of the insurance market: Case of Italy

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Abstract

The article aims to verify whether the matrix forecasting method is valid for predicting the insurance market development trends. The methodology is based on the application of the Franchon & Romanet matrix to the insurance market. Our results indicate that the Franchon & Romanet matrix could be usefully employed in the insurance market to identify the initial market position (calculated as financial development potential distributed through the structure of the capital funds available for insurance and financial activities) and the possible future development strategies. The core limits are concerned with the small use of the matrix methods for performance measurement of the insurance market. No empirical study has been conducted. The application of the matrix is concerned with risk management or rating transition matrices. Despite this circumstance gives originality to our paper, it poses a problem of data collection and limits the possibility to conduct the comparison with other scientific results. The construction of the matrix allows identifying the initial position of a country’s insurance market, to evaluate the possible development strategies and to choose the preferable ones. The originality of the paper consists firstly, in the innovativeness of applying to the insurance sector the tool of matrix forecasting; secondly, in providing a supporting tool to policy-makers decisions.

Keywords: Insurance, Matrix Forecasting Approach, Financial Strategies

Authors’ individual contribution: Conceptualization – I.N.; Methodology – I.N.; Data Analysis – S.D. and S.S.L.; Formal Analysis – I.N.; Writing – Original Draft – I.N.; Writing – Review & Editing – S.S.L. and I.N.; Supervision – S.D. and S.S.L.; Project Administration – S.D. and S.S.L.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G22, G17

Received: 23.06.2020
Accepted: 07.09.2020
Published online: 08.09.2020

How to cite this paper: Dell’Atti, S., Sylos Labini, S., & Nyenno, I. (2020). Matrix forecasting to investigate the capital efficiency of the insurance market: Case of Italy. Journal of Governance & Regulation, 9(3), 72-83. https://doi.org/10.22495/jgrv9i3art5