Evaluating Risk and Performance in Non-Life Insurance Markets: Evidence from EU and EEA Countries

Non-life insurance markets face growing pressure from inflation, geopolitical uncertainty, and climate-related risks. These developments increase the need for comprehensive performance evaluation from a risk-based perspective. In this context, this study examines the risk-based performance of non-life insurance markets across European Union (EU) and European Economic Area (EEA) countries using an integrated multi-criteria decision-making (MCDM) framework. The analysis includes eight indicators related to profitability, liquidity, growth, capital adequacy, and risk. Criterion weights were calculated using the Modified Standard Deviation (MSD) and Modified Preference Selection Index (MPSI) methods. These weights were then combined to obtain a single objective weighting structure. Subsequently, country rankings were obtained through the Combined Compromise Solution (CoCoSo) method. The data were taken from the European Insurance and Occupational Pensions Authority (EIOPA) database. The findings show that ROE and ROA received the highest integrated objective weights and contributed most strongly to differentiating country performance within the analyzed dataset. Austria, Germany, and Cyprus ranked as the highest-performing countries. The sensitivity analysis under different λ values also shows that the ranking results are stable. The results suggest that non-life insurance performance should not be evaluated only through profitability. Solvency strength, liquidity capacity, and risk exposure should also be considered. The study provides an integrated framework for comparative country-level assessment of non-life insurance markets and offers useful insights for regulators and policymakers.