TRANSACTION COSTS IN THE ACTIVITIES OF INSURANCE INSTITUTIONS

Abstract

Introduction. The concept of transaction costs plays an important role in understanding the relationship between insurer and the insured, the principle of mutual good faith in the relations of these participants, the nature of the insurance company, managing insurance relations to increase the size of the insurance portfolio and increase solvency, increase insurer value. The presence of transaction costs in practice leads to a decrease in the efficiency of insurance institutions, as well as to a decrease in the financial results of insurance. The purpose of the study is the theoretical substantiate the nature of transaction costs that arise in the activities of insurance institutions, and development of practical recommendations for their reduction. The methodological basis of the study is a systematic approach, methods of analysis and synthesis, theoretical and abstract-logical generalizations and hypotheses, methods of comparison and grouping, the method of classification. Results. The institutional features inherent in the formation and development of insurance institutions are highlighted. It is determined that the main reason for transaction costs in insurance relations is the existence of asymmetry of information about the object of insurance, the probability of the insured event, the financial stability of the insurer, etc. The main types of transaction costs of insurance institutions are described: information retrieval, negotiation, measurement, costs of specification and protection of property rights, costs of opportunistic behavior. Based on the study, potential ways to minimize transaction costs of insurance institutions are revealed: state policy, vertical integration, reduction of bureaucratization, development of information and communication technologies, transactional analysis, process management model. The practical significance of the study lies in the justification of the need to purposefully influence the amount of transaction costs of insurance institutions in order to minimize them.