Decision-making Optimisation in Insurance Market Using Big Data Analytics Survey

Nowadays insurance industry has huge innovation potential. Several key vectors for developing the concept of insurance tech include machine learning, business analytics, consumer protection rules, Big Data, artificial intelligence, neural networks, blockchain, and telematics. Technological innovations become widespread only when a community that supports them emerges, and COVID-19 has rapidly accelerated the changes that were already in full swing to a greater extent than any other factor. COVID-19 has helped reinforce the story and illustrate the results that technologies achieve on a large scale. Modern marketing and management approaches in insurance are viewed as an activity to optimize and control the insurance company's innovation and marketing activities. It would allow taking a strategically advantageous position in the insurance market. There are two kinds of insurance marketing: structural and commodity. Structural marketing could help to solve the problem of the economic efficiency of the activity of insurance companies. Commodity marketing helps to improve financial activity and, as a result, to increase profitability. This article summarizes the arguments and counterarguments within the scientific discussion on the place and prospects marketing and management in insurance (strategies, functions, principles) in the context of key innovation metrics. The study's primary purpose is to confirm the hypothesis about the functional link between the level of innovative development of the country and key insurance determinants as drivers for transformation in marketing strategies of insurance companies. In this regard, the array of input data is presented in the form of seven independent variables (regressors), six of which denote innovation measures, one is control variable, and five dependent variables (regressands), which identify the insurance sector. The study of the impact of innovation metrics on the insurance sector of the country in the article is carried out in the following logical sequence: 1) the formation of an array of input data; selection of relevant indicators using Principal Component Analysis; 2) formalization of functional relationships between variables by constructing five-panel Multifactor regression models with Random Effects; and 3) interpretation of the obtained results. Seventeen countries of Central and Eastern Europe were selected as the object of the study for the period from 2004 till 2019. The study empirically confirms the above hypothesis, which is evidenced by the following identified dependences. Key insurance determinants depend on innovation fluctuations. The most significant positive influence on the dependent variables is exercised by the Innovations index, Research and development expenditure, and Patent applications by residents. The study results could be helpful for insurance companies that provide new insurance technologies and seek to optimize activities to support innovative development. The main directions of marketing and management in insurance should be considered from two positions applying new technologies in insurance marketing and introducing new insurance products or services.

Insurtech is closely associated with digital transformation by new entrants that seek to disrupt insurance markets. However, the insurtech concept also includes its use by incumbent insurance companies, which are actively deploying a wide variety of insurtech applications to protect their market positions through innovation of their existing business models, e.g. through improved business processes or new insurance services. A theoretical insurtech business innovation model is developed that captures the effects of digital technology in insurance markets by considering innovation as a multi-dimensional concept that encompasses business processes, novel insurance products and changes to the insurance value chain. This framework is applied to an empirical sample of digital leaders: three incumbents and four new entrants. The results illustrate a variety of insurtech applications that include the transformation of business processes, products and new types of value chain configuration, as well as relatively minor enhancements to existing systems and business practices. It is shown that all the new entrants exploit artificial intelligence, big data and digital technology to build brand-new insurance services that emphasise innovative product features, high customer value and a delightful customer experience. In contrast, the legacy insurance firms tend to use digital technology in a defensive manner, e.g. the enhancement of existing insurance services, distribution channels and market positions. The exception is the launch of a telematics insurance service by an incumbent firm, where the telematics insurance effectively operates as a standalone business within a legacy insurance firm. The theory model is effective at analysing and evaluating both the type and magnitude of innovation. The case studies make an empirical contribution by illustrating state-of-the-art innovation by insurance disruptors and contrasts this with the defensive and sometimes novel digital strategies of incumbent firms. Future trends and research opportunities are outlined.

Introduction. The peculiarities of insurance marketing are determined, on the one hand, by the nature of the insurance service, and on the other, by the specifics of the insurance market. In modern conditions, the role of insurance marketing in the activities of insurance companies is growing, which is connected with the change in lifestyle and the risks that arise, increased competition in the insurance market, the development of digital technologies, and the growing awareness of the need and role of insurance in protection against risks. Therefore, a necessary condition for the successful operation of any insurance company in a competitive environment is the development of an effective marketing strategy that makes it possible to attract new customers, retain existing ones and increase profitability, as well as develop the brand and positive image of the insurer. The purpose of the article is to determinate the main areas of improvement of insurance marketing in Ukraine through the analysis of key factors affecting the quality of marketing policy in the context of the provision of insurance services. Results. The article identifies the main factors influencing the rapid development of insurance marketing. Based on a retrospective analysis, the main stages of the formation of insurance marketing (from the beginning of the 60s of the 20th century to the present) are considered. The key elements of the insurance marketing complex are identified, based on the theoretical and methodological principles of the functioning of marketing as an economic process. In order to deepen the understanding of the concept of insurance marketing, the existing approaches to defining the concept of "insurance marketing" were considered. Classification of influencing factors on consumer behavior in the context of insurance marketing is proposed. The peculiarities of insurance marketing are analyzed and the main aspects of the implementation of an effective insurance marketing strategy are summarized, taking into account international experience. Conclusions. Insurance marketing in Ukraine is becoming an increasingly important component of the success of insurance companies, especially in the conditions of growing competition in the market of insurance services. Accordingly, insurance companies in Ukraine actively use various marketing strategies to attract and retain customers, increase profits and promote the brand The main areas of improvement of insurance marketing in Ukraine are: use of digital communication channels, such as social networks and other online channels; personalized insurance products and services that meet the individual needs of clients; development of innovative insurance products and services; improving the quality of service and transparency of insurance services, which will allow insurance companies to increase the trust of clients in their services and ensure stable development in the market; use of artificial intelligence and data analytics.

This paper reviews the impact of data science and artificial intelligence (AI) on future ‘data-driven’ Insurance Markets. The impact of insurance automation (driven by so-called Black Swan events such as Covid-19) mirrors the impact of algorithmic trading that changed radically the Capital Markets (Koshiyama, et al., 2020). The data science technologies driving change include: Big data, AI analytics, Internet of Things, and Blockchain technologies. These technologies are important since they underpin the automation of the Insurance Markets and risk analysis, and provide the context for the algorithms, such as AI machine learning and computational statistics, which provide powerful analytics capabilities.New AI algorithms are constantly emerging, with each ‘strain’ mimicking a new form of human learning, reasoning, knowledge, and decision-making. The current main disrupting forms of learning include Deep Learning, Adversarial Learning, Federated Learning, Transfer and Meta Learning. Albeit these modes of learning have been in the AI/ML field more than a decade, they are now more applicable due to the availability of data, computing power and infrastructure. These forms of learning have produced new models (e.g., Long Short-Term Memory, Generative Adversarial Networks) and leverage important applications (e.g., Natural Language Processing, Adversarial Examples, Deep Fakes, etc.). These new models and applications will drive changes in future Insurance Markets, so it is important to understand their computational strengths and weaknesses.The contribution of this paper is to review the data science technologies and specifically AI algorithms, their computational strengths and weaknesses, and discuss their future impact on the Insurance Markets.

Currently, the insurance market is actively using modern technologies, which allows companies to compete with each other and attract customers. However, the possibilities of introducing artificial intelligence and big data (AI and DB) into the regulated sphere, which is insurance, are usually limited compared to unregulated sectors. The purpose of the study is to substantiate the need and develop measures to regulate the use of AI in insurance, in general, and auto insurance, in particular, as well as to determine the prospects and risks of the spread of the use of AI technologies in insurance. The research used scientific works of domestic and foreign scientists in the field of AI and DB development in insurance, regulatory legal acts and program and strategic documents for the development of the Russian insurance market, as well as data generated by the authors on the basis of official statistical materials. For analytical data processing, the method of statistical analysis, the system-logical method, as well as such general scientific methods as induction, deduction and synthesis are used. The slowdown in the growth rate of the insurance market at the present time is due to both the tightening of the regulator’s requirements for the financial stability of insurers, and the lack of prospects for development, the complexity of the introduction of AI and DB in insurance. A competent state approach to regulating the activities of subjects in the topic under consideration entails a number of benefits and advantages, will allow to neutralize or reduce the influence of the identified constraining factors.

The article examines the current state and digital vectors of the development of the insurance market of Ukraine and identifies promising directions for the digitalization of insurance. The essence of the insurance category is revealed. It is noted that the insurance market in Ukraine lags far behind developed countries. An analysis of the dynamics of the number of participants in the insurance market, the amount of assets of insurance companies, the structure of the insurance portfolio by types of insurance was carried out, and the main trends of the insurance market in Ukraine were revealed. The keys to the stable development of insurance activity in Ukraine have been defined as: quick response to new conditions and customer requests; the ability to adapt, accumulate positive experience, analyze and correct negative moments; develop harmoniously, find a balance between the accumulation of new knowledge and their practical application. Factors influencing and functioning of the domestic insurance market are determined. The features of modern trends in digital insurance tools, as an important mechanism for the growth of the insurance market, are revealed. It was found InsurTech that modern technologies are important for insurance companies. These InsurTech nclude artificial intelligence technologies, new inventions in the field of cyber security, big data analysis («bigdata), blockchain technologies, the Internet of Things (LoT ) and smartphone applications.

This article mainly describes the digital trend and development status of the Chinese insurance market in the 21st century. The statistical methods are used to highlight the role of digital technology in the development of the Chinese insurance market. The result of this article is that digital technology promotes the rapid development of the Chinese insurance market, accelerates the digital trend the market more and more open. The number of the companies investing in China are growing, so the development prospects of Chinese insurance market are extremely broad. The technologies of cloud computing, big data and artificial intelligence affect the development of the digital economy. The Chinese Internet companies already have got the independent innovations in the said, which has laid the foundation for the digitalization of the Chinese insurance market, which is conducive to expanding the scale of the insurance market, accelerating the pace of the Chinese insurance company system reform, and accelerating the internationalization of the Chinese insurance industry. The parallelquel of the insurance markets development of Russia and China.KeywordsChinese insurance marketFormationDigitalizationStructural characteristicsInsurance companyInsurance industryIoTInsurance premium

Modern insurance business, including in developing countries, is associated with the introduction of innovations. The purpose of this paper is to clarify the features of the insurance market’s innovation in Ukraine by reviewing the literature and analytical data on the market as a whole and its individual participants. The results show that innovations implemented in the insurance market can be classified according to certain characteristics, which provides opportunities for its empirical study. The analysis reveals that the peculiarities of the innovative development of the Ukrainian insurance market are determined by many factors, among which digitalization and increased risks due to the COVID-19 pandemic are the main ones today. Based on the analysis of leading insurance companies’ practice, it is concluded that they implement only a limited amount of innovations, mainly of incremental and combinatorial types, and do not actively use modern communication channels with consumers. The results highlight the need for insurance and FinTech companies to cooperate in the innovation ecosystem, which is still being formed in the Ukrainian insurance market. The study also considers the possibility of using a system of indicators to assess the innovativeness of insurance companies.

Introducing New technologies in insurance distribution seems to be inevitable and should be based on applicable legal regulations.Thisprocess, however, isassociated with many legal problems in the regulatory and supervisory as wellas civil law. Robo-advice, artificial intelligence, digital cross-sellers insurance, Big Data Analytics and customer data generation, Internet of Things, as well as enti tiesapplying blockchain technology to manager insurance contracts, their liquidation and clients' claims constitute competition for traditional (classic) insurance distributor activity. Considerations, due to the limitem volume of the article, signal on selected legal problems (in national and EU law) regarding the introduction of innovations in the insurance market.

The Ukrainian insurance market shows an increase in quantitative indicators of activity, but the functional and institutional characteristics do not meet modern requirements. Now the insurance market of Ukraine is undergoing important regulatory changes, as a result of which the NBU is beginning to regulate the work of insurers, which gives hope for increasing the quality of activity of insurance market participants. Modern financial technologies have transformed the insurance market, they include big data, artificial intelligence, blockchain, mobile access, which gave impetus to the creation of new insurance products and created opportunities for facilitating clients' access to insurance services.

In 1992 the European Commission adopted an exempting regulation for the insurance market that was replaced in 2010 by the so called Insurance Block Exemption Regulation (IBER) that will expire on 31 March 2017. The exemption regards the application of competition rules to certain types of agreements in the insurance sector, joint compilations, tables and studies which involve the exchange of information between insurers; and also the common coverage of risk via co-(re)insurance pools. On 17 March, the European Commission released a report focusing on the future of the Insurance Block Exemption Regulation in which it is recommended to not renew IBER. This recommendation comes from the consideration that consumers were not receiving a fair share of the resulting benefits from the cooperation exempted by IBER and that is a Commission’s long-term strategy to eliminate industry-specific exemptions from competition law. This paper aims to investigate, under a law and economics approach, if other factors can be relevant in deciding to not provide any more exemptions for the insurance companies. After an introduction, in the following part, the economics effects of the exchange of information are analysed in terms of asymmetric information remedy and competition restrictions; then the story of the block exemption is presented and the next paragraph deals with the change in the insurance market after the end of the exemption; finally, some conclusive remarks are drawn in the light of the Big Data era.

Insurance companies form their own business models based on the interests of stakeholders. Changes in business models are due to the impact of COVID-19, deepening digitalization and customer orientation. Accordingly, the aim of the study is to systematize the approaches to business models of insurance companies using emerging market country (Ukraine) as an example, and to show the change in a business model according to the CANVAS approach under the influence pandemic. In accordance with the purpose of the study, business models of insurance companies were systematized and grouped into blocks: value-based, structural, complex, and strategic. The strategic block identifies strategic changes in the activities of insurance companies and reflects trends on the insurance market. With this in mind, business models of insurance companies should reflect the set of strategic decisions, their architecture, structure and facilitate the management of value creation operations on the insurance market. Business models have changed from traditional to innovative, hybrid and digital-oriented. The main changes in the business models of insurance companies are omnichannel communications, the launch of chatbots, Big Data, Mobile ID, Bank ID, online access to registers, Blockchain. The COVID-19 pandemic has led to a shift in business models towards socially responsible business and adherence to sustainable development goals.

THE PURPOSE OF THE ARTICLE is concerned with studying the influence of key factors on the formation of innovative strategies of insurance companies in the Ukrainian market and determining their significance in the macro- and micro-environment. RESEARCH METHODS. The article uses the following methods: case analysis, surveys, as well as analysis of internal documentation of insurance companies, tabular and graphical methods, methods of analysis and synthesis, literature research method, etc. PRESENTING MAIN MATERIAL. In the current conditions of economic uncertainty and high competition in the market, Ukrainian insurance companies are forced to look for new approaches to improve their efficiency and competitiveness. Innovative strategies are becoming a key tool for adapting to rapid changes in the market and meeting customer needs. At the same time, a number of factors, both internal and external, influence the formation of such strategies. Important external factors include the digitalisation of the economy, regulatory changes, globalisation of financial markets and changes in consumer behaviour. Insurance companies face the need to adapt to new technologies, such as artificial intelligence, big data and blockchain, which can significantly increase the efficiency of business processes and improve customer service. In addition, Ukrainian insurance companies have to take into account the peculiarities of the domestic market, including macroeconomic instability, the legal framework and competition from international companies. Internal factors, such as corporate culture, management’s strategic vision, investment in innovation and human capital development, also play an important role in shaping insurance companies’ innovation strategies. Companies that fail to adapt to new conditions risk losing their market position. Given the importance of innovation for the sustainable development of the insurance industry and the growing role of technology in the economy, a study of the key factors influencing the formation of innovation strategies of Ukrainian insurance companies is extremely relevant, which will help determine the optimal approaches to the development of insurance companies in the face of modern challenges. CONCLUSIONS. The Ukrainian insurance market is undergoing active transformation due to growing competition, changes in regulatory policy, digitalisation of the economy, globalisation and martial law, which complicates all processes in the country’s economy. Innovative strategies are becoming the main tool for increasing competitiveness, improving customer experience and optimising processes in insurance companies. The study has shown that among the macroeconomic factors, the main ones that influence the formation of innovative strategies of insurance companies in the Ukrainian market are: economic factors, technological factors, socio-cultural factors, regulatory factors and the competitive environment. It is also found that since the modern insurance market is characterised by high competitiveness and rapid changes in the technological environment, the successful implementation of innovative strategies depends not only on macro-environmental factors, but also on specific internal factors (micro-environment): corporate culture, organisational structure, management processes, human capital. Thus, the study of the influence of key factors on the formation of innovative strategies of insurance companies in Ukraine is important in terms of adaptation to changes, which can contribute to the sustainable development of this industry in the face of modern challenges. KEYWORDS: innovation strategies; insurance companies; insurance market; key factors; formation; martial law; digitalisation; Ukrainian market; adaptation; sustainable development.

The subject of this research is the trend in development of the insurance market of China in the context of digitalization of modern financial and economic sectors. China's insurance market is quite large and promising in comparison with the markets of other countries. The listed factors define the relevance of studying its development and key trends. A synoptic analysis is conducted on the situation in China’s insurance market, including its evolution, structure, and primary market indicators, status of the leading market actors, impact of digitalization on the market, and future trend. The novelty of this work consists in a new perspective upon evolution and current state of the insurance market of China, as well as in generalization of digital development and future trends. The conclusion is made that digital technologies presented by big data, artificial intelligence, blockchain, etc., brought profound changes to the image of China's insurance industry, as well as became a new driving force for the development of an entire sector. The wave of digitalization in financial and economic sphere would contribute to the development of insurance sector, create and broaden new demands in risk management, as well as provide technical support that turns challenges into opportunities for the insurance industry. Despite the fact that over the recent years China's insurance sector has faced multiple challenges, it demonstrates the long-term development prospects.

Today, almost all sectors of the economy use information systems, technologies, especially various artificial intelligence tools, the use of which leads to the emergence of such a term as digital insurance. Digital insurance does not have a clear definition, but in general it can be described as signing insurance contracts, reviewing, receiving information about an accident, and performing any other insurance-related activities using devices or systems. The article presents the definitions of digital insurance, an attempt is made to present and analyze the main insurance tools (internet, big data, chatbot, blockchain) that are used in the global and insurance markets of the Republic of Armenia. A numerical analysis of artificial intelligence tools of the global insurance market has been carried out. As the main direction in the development of online insurance, the dynamics of online insurance premiums, which characterizes the RA CMTPLI system, the share of online CMTPLI contracts of insurance companies in the total number of CMTPLI contracts and the share of online CMTPLI contracts in the total number of CMTPLI contracts (%). Also, issues were raised that impede the development and expansion of the RA digital insurance market.