ANALYZING MARKET PERFORMANCE OF INSURANCE COMPANIES DURING THE GLOBAL FINANCIAL CRISIS

The objective of this research paper is to analyze the effect of the global financial crisis 2007- 2008 on market indicators of three insurance companies operating in United Arab Emirates, using four market indicators, market value, earnings per share, market to book value, and share yield. Several statistical analyses consisting of descriptive analysis, coefficient of variation, correlation analysis and ANOVA analysis were used. Coefficient of variation analysis shows varying levels of stability for the four indicators across the three companies, indicating a lack of uniformity in effects of the crisis on each company. Moreover, correlation analyses of these four market indicators reveal a mostly weak and at times negative relationship. This can largely be attributed to the effects of external economic factors and the degree of uniqueness in how each insurance company responded to such adversarial forces. Finally, Anova analysis of market price indicator supports the occasional existence of similarities among the three variables. Furthermore, Anova analysis of the earnings per share indicator shows little variation in mean performance across the three companies over the period. Similarly, Anova analysis of market value to book value indicates diversity in the means across the groups. The analysis of Anova on share yield reveals an insignificant similarity between the means across the insurance companies. The results of this research analyses reveal that the financial crisis imposed diverse range of effects on the market performance of these insurance companies. Moreover, the findings highlight the significant market risk exposure that occurred during the financial crisis. The implications of elevated market risk exposure for insurers are highly pertinent and should not be overlooked. Insurers prioritizing long term growthshould follow the path of sustainability by reducing risk exposure by putting into place stringent risk mitigation strategies.