BALANCED SCORECARD IN MANAGEMENT ACCOUNTING AND ITS APPLICATION TO INSURANCE COMPANIES IN TURKEY

Abstract

Purpose -   This paper examines the insurance companies’ (in Turkey) opinions regarding balanced scorecards and techniques they used to measure performance.    

Methodology -   A questionnaire form primary was sent to the Association of the Insurance and Reinsurance Companies in Turkey to identify sub-criteria to be used four perspectives of balanced scorecard. 41 experts responded to the questionnaire. In accordance with the data, another questionnaire was prepared to determine performance measurement, perspectives, criteria and balanced scorecard. Then the second questionnaire was sent to 43 companies (excluding pension companies because of different criteria). 30 companies responded to the questionnaire. The data about opinion of performance measurement and balanced scorecard were analyzed by using SPSS. However, the data about performance criteria, perspectives were analyzed by Analytical Hierarchy Process. For this analyze, we used the geometric mean of 30 companies.

Findings-  Findings indicate that insurance companies (66.7%) prefer balanced scorecard as a tool for performance measurement. It is observed that customer and financial perspectives were found to be the most highlighted perspectives than other ones, internal business processes and learning-growth perspectives, among performance perspectives utilized. Besides, two insurance companies use ‘competence perspective’ in addition to the four perspectives in their balanced scorecard.

Conclusion- Insurance companies can make use of these criteria to improve their performance and work more effectively by elaborating the criteria which reduce their performance. In this way, as they improve their performance, they can contribute to the economy, especially the finance sector.

Keywords

• Firm performance,management accounting,balanced scorecard,AHP,insurance companies

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