Análisis Interno AMOFHIT

The dendrogram method was employed in demonstrating the results of the Ward’s Technique that was used for hierarchical clustering analysis. Dendrogram was scaled in 0-25 units from right to left. Distances between units are equal. Horizontal lines show distance, while vertical lines show unified clusters.

Figure 1 Dendrogram for Ward’s Technique

The clustering analysis results obtained after examining the dendrogram belonging to the Ward’s Technique are given in Table 4. The cluster numbers in tables are used not to indicate the level of insurance sector for each cluster, but to differentiate clusters from each other. Analysis was performed by increasing the number of clusters by one every time, that is, taking k= 2, 3, 4; respectively. When the number of clusters is 5, statistically significant results were obtained but not shown in tables. Since k was found to be 3,6 using the formula, which is one of the most practical methods to find the number of k, the appropriate number of clusters will probably be k= 3 or 4.

Table 4 Clustering Results for Ward’s Technique

Number of

Cluster

Clusters Elements of Cluster

C=2 Cluster 1 AT,BG,CY,CZ,DE,ES,GR,HU,IT,LT,MT,PL,PT,RO,SI,SK,TR Cluster 2 BE,DK,FI,FR,IE,LU,NL,SE,UK C=3 Cluster 1 AT,BG,CY,CZ,DE,ES,GR,HU,IT,LT,MT,PL,PT,RO,SI,SK,TR Cluster 2 BE,DK,FI,FR,IE,LU,SE,UK Cluster 3 NL C=4 Cluster 1 BG,CY,CZ,ES,GR,HU,LT,MT,PL,RO,SI,SK,TR Cluster 2 AT,DE,IT,PT Cluster 3 BE,DK,FI,FR,IE,LU,SE,UK Cluster 4 NL

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When the number of clusters is thought to be 2; Turkey shares a cluster with Austria, Bulgaria, Cyprus, Czech Republic, Germany, Spain, Greece, Hungary, Italy, Lithuania, Malta, Poland, Portugal, Romania and Slovenia Slovakia. When it is thought to be 3, Turkey shares a cluster with Austria, Bulgaria, Cyprus, Czech Republic, Germany, Spain, Greece, Hungary, Italy, Lithuania, Malta, Poland, Portugal, Romania and Slovenia Slovakia. When it is thought to be 4; Turkey, Bulgaria, Cyprus, Czech Republic, Spain, Greece, Hungary, Lithuania, Malta, Poland, Romania, Slovenia and Slovakia are placed in the same cluster. Notable points here are that the Netherlands form separate clusters alone, and that Bulgaria, Cyprus, Czech Republic, Spain, Greece, Hungary, Lithuania, Malta, Poland, Romania, Slovenia, Slovakia and Turkey are always placed in the same cluster.

In the clustering analysis, the normality of distance values is considered adequate. The results of the Kolmogorov-Smirnov Normality Test, which was performed to determine whether distance values exhibit normal distribution according to the numbers of cluster, are presented in Table 4. When the number of clusters is 2, 3 and 4; distance values are normally distributed (p>0, 05).

Table 5 The Kolmogorov-Smirnov Normality Test

C=2 C=3 C=4 N 26 26 26 average 696,28 524,15 370,09 standard deviation 589,45 348,60 205,53 extreme distance Absolute 0,244 0,189 0,076 Positive 0,244 0,189 0,076 Negative -0,192 -0,109 -0,062 Kolmogorov- Smirnov Z 1,246 0,965 0,385 p 0,090 0,309 0,998

The k-means clustering analysis results, found with respect to eight sector variables for 2010, are presented in Table 6.

Table 6 Clustering Results for k-means Technique

Number of

Cluster

Clusters Elements of Cluster

C=2 Cluster 1 AT,BG,CY,CZ,DE,ES,GR,HU,LT,MT,PL,PT,RO,SI,SK,TR Cluster 2 BE,DK,FI,FR,IE,IT,LU,NL,SE,UK C=3 Cluster 1 AT,BG,CY,CZ,DE,ES,GR,HU,LT,MT,PL,PT,RO,SI,SK,TR Cluster 2 BE,DK,FI,FR,IE,IT,LU,SE,UK Cluster 3 NL C=4 Cluster 1 BG,CY,CZ,ES,GR,HU,LT,MT,PL,RO,SI,SK,TR Cluster 2 AT,DE,IT,PT Cluster 3 BE,DK,FI,FR,IE,LU,SE,UK Cluster 4 NL

When the number of clusters is thought to be 2; Turkey shares a cluster with Austria, Bulgaria, Cyprus, Czech Republic, Germany, Spain, Greece, Hungary, Lithuania, Malta , Poland, Portugal, Romania, Slovenia and Slovakia. When it is thought to be 3, Turkey shares a cluster with Austria, Bulgaria, Cyprus, Czech Republic, Germany, Spain, Greece, Hungary,

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Lithuania , Malta , Poland, Portugal, Romania, Slovenia and Slovakia. When it is thought to be 4; Turkey Bulgaria, Cyprus, Czech Republic, Spain, Greece, Hungary, Lithuania, Malta, Poland, Romania, Slovenia and Slovakia are placed in the same cluster. Notable points here are that the Netherlands form separate clusters alone, and that Bulgaria, Cyprus, Czech Republic ,Spain, Greece, Hungary, Lithuania , Malta , Poland, Romania, Slovenia , Slovakia and Turkey are always in the same cluster. Although the Ward’s Technique and k-means technique results are the same, the only difference is that, in the assumptions of number of clusters is 2 and 3, while Turkey and Italy are placed in the same group in the Ward’s Technique, they are in different groups in the k-means technique.

One Way ANOVA Variance Analysis results, performed to examine the differences between variables for each cluster, are given in Table 6. In the ANOVA results in cluster analysis, it is normal for the variables to be found different for clusters, because clustering analysis maximizes the difference between the clusters. Through these results, the variables that are the most influential in determining clusters are found.

Table 7 ANOVA Values*

Indicators C=2 C=3 C=4 F p F p F p i1 0,027 0,871 1,485 0,247 1,345 0,285 i2 18,344 0,000* 18,393 0,000* 15,241 0,000* i3 109,142 0,000* 77,028 0,000* 168,725 0,000* i4 36,169 0,000* 22,062 0,000* 24,230 0,000* i5 2,240 0,147 1,074 0,358 1,667 0,203 i6 18,344 0,000* 18,393 0,000* 15,241 0,000* i7 11,121 0,003* 39,208 0,000* 44,317 0,000* i8 2,585 0,121 35,012 0,000* 29,607 0,000*

*Indicators that are considered important in the classification of clusters are shown with the sign * on the p column (p<0.05 ).

In Table 6; when the ANOVA results for the k-means technique are reviewed, it is seen that i2, i3, i4, i6 and i7 are the indicators influential in formation of all clusters. The common conclusion observed in other clustering techniques that were tried but not included in the study is that the Netherlands tend to form a separate cluster. The insurance sector data also show that the Netherlands is ahead of all other EU member countries in insurance sector. Turkey, on the other hand, is in a condition similar to those of Bulgaria, Cyprus, Czech Republic, Spain, Greece, Hungary, Lithuania, Malta, Poland, Romania, Slovenia and Slovakia.

6. Conclusions

Among the main priorities of the EU in the area of financial services is to form a single market in insurance sector. Formation of a large and single insurance market is of great importance in terms of improving and standardizing the insurance sector. EU standards should be implemented in Turkey in order to improve the insurance sector. Legislative works are being conducted for improving the harmony with the EU in the insurance sector and for the formation of a single insurance market.

Although there have been improvements in the adjustment of the Turkish insurance sector to the EU market, significant deficiencies still persist. These deficiencies are seen mostly in legal and financial areas. Insurance sector has been in a rising trend since 2006 and it grows faster with the rise in the premium production.

The findings of the study show that while Belgium, Denmark, Finland, Ireland, France, Luxembourg, Sweden and England form a cluster; the Netherlands forms a single separate

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one. It could be stated that the Netherlands is more advanced in insurance sector than other countries. It is ahead of others especially in terms of premium production per capita and the ratio of total premiums to GDP. In Turkey, the share of the insurance sector in the economy is very low compared to EU members. Turkey has the similar sector level with countries that it shares cluster: Bulgaria, Cyprus, Czech Republic, Spain, Greece, Hungary, Lithuania, Malta, Poland, Romania, Slovenia and Slovakia. It is safe to argue that these countries relatively lag behind and pull down the EU sectoral average.

References