Abstract
The Ukrainian stock market is rated as an emerging market, which is characterized by high profitability and higher risk level as compared to developed economies. Securities transactions on the Ukrainian stock market are accompanied by stable uncertainties. Moreover, insurance is the most effective way to reduce financial risks and their negative effects. Given the current economic and political instability, financial risk insurance can ensure the economic performance of business entities and stimulate their further economic development. Financial risk insurance is the liability insurance in its nature, but its terms are often included in property insurance. This insurance sector has considerable facilities, which require activation of new insurance products that will be able to protect individual and institutional investors. Insurance and stock markets are direct competitors for limited investor resources, including strategic sources such as temporarily free institutional investor funds and household savings. In general, although there is a significant interaction between the insurance and other financial markets in Ukraine, it is hardly realized at all, unlike foreign economies, where it is used to its maximum. With the development of the insurance culture of the population and insurance in general, the relevance of insurance services in a high-risk segment like the stock market increases. The article harmonizes types of financial risks arising on the stock market with the methods of their leveling (insurance, hedging, diversification, etc.), determines the risk factors of the investor in the stock market, and specifies the professional risks of financial institutions. For the Ukrainian stock market participants, the use of two types of insurance coverage, namely, Bankers Blanket Bond and Financial Institution Professional Indemnity, is proposed.
Highlights
The Ukrainian stock market belongs to the category of emerging markets, which are defined by high profitability and higher risk degree as compared with developed economies
The ever-increasing number of financial instruments offered by the domestic stock market, as well as many factors influencing the change in their value, lead to the fact that an individual investor in most cases is not able to assess the full range of risks related to investing in specific financial instruments
When it comes to the liquidity reducing investment risks of financial institutions, their liquidity risks is reduction is possible through their diversification managing the institution’s assets
Summary
The Ukrainian stock market belongs to the category of emerging markets, which are defined by high profitability and higher risk degree as compared with developed economies. Insurance and stock markets are direct competi- to the traditionally raising capital through tors for limited investor resources, including stra- the stock market They may consider securitegic sources such as temporarily free institutional ties issue as a risk transfer option With the development of the inAt the same time, the guaranteeing insurance surance culture of the population and insurance company assumes the obligation, in case of in general, the relevance of insurance services in its client insolvency, to pay its debts to third such a high-risk segment as the stock market is inparties. Despite the prospects of this market antee is a good argument for determining the for insurance companies, not all of them are ready investment reliability, so issuing guarantees in to take financial risks, in the stock marWestern insurance markets is very common.
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