Methodical aspects of analysis and risk management of an insurance company

The object of research is the risks of the insurance company. The paper is devoted to the study of the risks of the insurance company, which generate threats to the level of its solvency. The general state of economic development in general and the insurance market in particular determine the operating conditions of any insurer. The insurance company's ability to regulate such conditions is limited, but the formation of a stable state of the internal environment creates opportunities to adapt to threats from the external environment. Timely detection of potential risks in the activities of the insurer, provision of reserves to cover possible losses related to risks, enable companies to overcome the consequences of risks with minimal losses. The methodical basis for evaluating potential risks in the insurance company's activities is strategic analysis methods, such as PEST and SWOT analysis. Their results give an idea of the state of threats in the external environment and the potential opportunities of the insurer's internal reserves. The methods of economic-mathematical modeling and forecasting make it possible to assess the current state of the company and investigate its behavior under the influence of external and internal factors. The basis of the forecast model of risk analysis of an insurance company is formed by the coefficient of risk of loss of solvency, calculated according to the key parameters of the assessment of its financial condition. The reliability of the forecast of the possible risk of loss of the insurer's solvency is ensured by constructing a trend line and forming a forecast sheet in the MS Excel software environment. The forecast sheet forms the probabilities of the values of the indicators with a distinction between optimistic and pessimistic levels of the forecast. Using the trend line and finding the value of the coefficient of determination (R2), the probability of realizing the forecast of growth or reduction in the value of each individual parameter of the model is determined. The practical significance of the obtained results lies in the possibility of increasing the efficiency of the use of available resources and reserves in the process of risk management. The proposed methodical approach can be used to assess the impact of risks in the insurer's activities, which will increase the accuracy of the obtained results.

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Publication Details

Journal
Technology audit and production reserves
Published
2024-10-31
DOI
https://doi.org/10.15587/2706-5448.2024.314391
Primary Topic
Banking, Crisis Management, COVID-19 Impact
Type
article
Field-Weighted Citation Impact
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article

Methodical aspects of analysis and risk management of an insurance company

Інна Алексєєнко, Tetiana Kazadaieva
Technology audit and production reserves
Banking, Crisis Management, COVID-19 Impact
article

Methodical aspects of analysis and risk management of an insurance company

Інна Алексєєнко, Tetiana Kazadaieva
article en

Abstract

The object of research is the risks of the insurance company. The paper is devoted to the study of the risks of the insurance company, which generate threats to the level of its solvency. The general state of economic development in general and the insurance market in particular determine the operating conditions of any insurer. The insurance company's ability to regulate such conditions is limited, but the formation of a stable state of the internal environment creates opportunities to adapt to threats from the external environment. Timely detection of potential risks in the activities of the insurer, provision of reserves to cover possible losses related to risks, enable companies to overcome the consequences of risks with minimal losses. The methodical basis for evaluating potential risks in the insurance company's activities is strategic analysis methods, such as PEST and SWOT analysis. Their results give an idea of the state of threats in the external environment and the potential opportunities of the insurer's internal reserves. The methods of economic-mathematical modeling and forecasting make it possible to assess the current state of the company and investigate its behavior under the influence of external and internal factors. The basis of the forecast model of risk analysis of an insurance company is formed by the coefficient of risk of loss of solvency, calculated according to the key parameters of the assessment of its financial condition. The reliability of the forecast of the possible risk of loss of the insurer's solvency is ensured by constructing a trend line and forming a forecast sheet in the MS Excel software environment. The forecast sheet forms the probabilities of the values of the indicators with a distinction between optimistic and pessimistic levels of the forecast. Using the trend line and finding the value of the coefficient of determination (R2), the probability of realizing the forecast of growth or reduction in the value of each individual parameter of the model is determined. The practical significance of the obtained results lies in the possibility of increasing the efficiency of the use of available resources and reserves in the process of risk management. The proposed methodical approach can be used to assess the impact of risks in the insurer's activities, which will increase the accuracy of the obtained results.

Technology audit and production reservesVol. 5(4(79))
Simon Kuznets Kharkiv National University of Economics (UA)
Openalex Percentile: Top 64%
Banking, Crisis Management, COVID-19 Impact
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