New Methods in Assessing the Risks and Solvency of Insurance Companies

 Nataliia TKACHENKO1, Yuliia KOVALENKO2 and  Liudmyla BOHRINOVTSEVA3

1Institute of Continuing Education, Taras Shevchenko National University of Kyiv, Kyiv, Ukraine

2,3Department of Financial Markets, University of the State Fiscal Service of Ukraine, Irpin, Ukraine

Academic Editor: Liudmyla Chvertko

Cite this Article as:

Nataliia TKACHENKO, Yuliia KOVALENKO and Liudmyla BOHRINOVTSEVA (2022)," New Methods in Assessing the Risks and Solvency of Insurance Companies", Journal of Eastern Europe Research in Business and Economics Vol. 2022 (2022), Article ID 765785, DOI: 10.5171/2022.765785

Copyright © 2022. Nataliia TKACHENKO, Yuliia KOVALENKO and Liudmyla BOHRINOVTSEVA. Distributed under Creative Commons Attribution 4.0 International CC-BY 4.0

Abstract

Determining the solvency of insurance companies on the basis of comprehensive consideration of different risk groups is becoming especially relevant in modern financial activity, which requires thorough research of these aspects of the problem. This article contains the types and structuring of the main risks of insurance activity and it also presents their relationships. Methods. The article is based on general scientific methods of cognition especially on such as analysis and synthesis, induction and deduction, system-structural method, quantitative and qualitative comparison, grouping, method of logical generalization. Results. There is a proposed method of assessing the solvency of national insurance companies which is based on the acquired foreign approaches, considering various risk groups such as insurance, market, credit and operational risks. In order to take into account all the main risks faced by a particular insurer, the estimating technique is subject to significant transformation. A feature of the new system should be a change in approaches to assessing solvency basing on individual risks inherent in a particular insurance company. Conclusion. Practical calculations prove that the new approach proposed by the authors to determine the regulatory solvency, which is based on a set of risks, including insurance, market, credit and operational risks, requires increased requirements for the actual capital of the insurance company. The main advantage of this approach towards assessing the solvency of the company is an analytical assessment of various risks, which allows improving insurance risk management, control risk positioning in the financial market, effectively managing economic activity and ensuring overall financial stability.

Keywords: insurance companies, solvency, risk
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