Abstract
In the current conditions of the Ukrainian economy, which is characterized by crisis phenomena and frequent changes in legislation, the insurance organizations are facing a number of difficulties in maintaining their financial sustainability. Moreover, these processes take place under the increased requirements for solvency of insurers. However, a significant part of domestic insurance companies is financially unstable, which is conditioned not only by the lack of funds, but also by the low level of management. This situation hinders the further development of the insurance market in Ukraine and has a negative impact on all areas of the domestic financial system and prevents it from successful integration into the European financial field. In order to address this problem, it is necessary to distinguish the key groups of risks that affect the financial sustainability of insurance organizations, among which there are the following: insurance, strategic, market risk, risk of inefficient capital structure, risk of limiting the insurance company’s liquidity, tax risk, investment risk, operational risk, the risk of ineffective organizational structure of the enterprise, and information risk. It should be noted that under conditions of changing environment, the impact of these risks only increases, and therefore the task of minimizing the impact of these risks on the activities of insurance companies is highly important. Accordingly, the authors of the article proposed a four-stage strategy to manage the financial sustainability of the insurance company, the purpose of which is to identify the risks of limiting the insurer’s financial sustainability, their qualitative and quantitative assessment, as well as the development and implementation of appropriate measures to minimize and eliminate unacceptable consequences.
Highlights
The dynamic, fleeting processes that impose a growing pace of change on society, the liability of macroeconomics and regional economies prevail in today’s economic environment of political and economic events
In the current conditions of the Ukrainian economy, which is characterized by crisis phenomena and frequent changes in legislation, the insurance organizations are facing a number of difficulties in maintaining their financial sustainability
In order to address this problem, it is necessary to distinguish the key groups of risks that affect the financial sustainability of insurance organizations, among which there are the following: insurance, strategic, market risk, risk of inefficient capital structure, risk of limiting the insurance company’s liquidity, tax risk, investment risk, operational risk, the risk of ineffective organizational structure of the enterprise, and information risk
Summary
The dynamic, fleeting processes that impose a growing pace of change on society, the liability of macroeconomics and regional economies prevail in today’s economic environment of political and economic events. Advanced insurance companies in terms of management are featuring: the use of The risk of limiting the financial sustainability of optimal principles of underwriting methodol- an enterprise is the likelihood of financial losses ogy, the adoption of underwriting decisions due to inefficient capital structure, which leads to on large risk insurance at the level of centers an imbalance of cash flows (Shulgina & Glekov, of underwriting in the parent companies, the 2012). The especially important task is can identify the expected risk of financial sustainto develop an effective risk management strategy ability and determine its qualitative characterfor the limiting financial sustainability risk of in- istics (Tkachenko, 2009) It should be surance companies, which can ensure the most ef- noted that even in countries with developed marficient use of available resources and capacity to ket economies, the determination of attributes for achieve the goals. Performance of structural units of the insurance organization should be determined at the level of “key factors” in the management of financial sustainability, as it directly affects its outcome
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