[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/a/bas/econst/y2022i5p179-194.html
   My bibliography  Save this article

Assessing the Activities of Insurance Companies Due to the Disease of Private Pension

Author

Listed:
  • Nataliya Vnukova
  • Daria Davydenko
  • Svitlana Achkasova
  • Olexandr Yagolnitskyi
Abstract
The purpose is to develop a methodological approach and confirm the hypothesis of low risk of the entire market of life insurance companies in Ukraine according to the financial statements to ensure private pensions. Subject – methodological support for risk assessment of insurance companies for life insurance according to the financial statements to ensure private pension. Object – the process of assessing the risk of the activities of insurance companies for life insurance. Research base – the whole market of insurance companies for life insurance of Ukraine, which provide services for non-state pension. The adaptation method of integral risk index (hereinafter – IRI), which allows to divide insurance companies into four zones, was used in the study: catastrophic IRI; critical IRI; acceptable IRI; risk-free IRI. Each zone is determined by the level of compliance of the insurance company’s performance indicators with the regulatory limits in Ukraine. A complete list of life insurance companies providing private pension provision in Ukraine was selected as a study. The method is based on a score on T. Saaty’s scale, which allows determining the rank of the entities in the insurance market according to their risk. All evaluated life insurance companies in the Ukrainian private pension market reliably build a risk management strategy which allows to assess this market with low risk. In order to have risk-free activity, it is necessary for the companies of allowable risk zone to strengthen some indicators, namely to increase the appropriate level of investment and balance the levels of accounts payable and receivable. The obtained results of establishing the risk levels of all life insurance companies which provide private pension provision through the definition of IRI allow to form an individual risk assessment of the insurance company and develop measures for prevention and counteraction of risks, establish general trends of the insurance market development from the private pension scheme of the country by means of the detailed assessment of particular indicators. The practical effectiveness of the suggested experimental approach is potential and it can be tested in the activities of other insurance companies, while new indicators of changes in the regulation system of the Ukrainian insurance market as to the suggested algorithm will be the basis for determination of risk zones which are adapted for the changes. The scientific novelty is to develop a methodological approach to risk assessment of life insurance companies to provide private pensions, which consists in a systematic combination of evaluation stages using the proposed financial indicators, how to measure and integrate them, the formation of the proposed scale risk and its interpretation, which allows for constant monitoring of the level of risk of the entire market of life insurance companies to provide private pensions on the basis of public financial reporting. This approach allowed to assess the risk of all life insurance companies in the market of private Ukrainian pension scheme that proved the low level of risk in this market which is positive for consideration of its development strategies.

Suggested Citation

  • Nataliya Vnukova & Daria Davydenko & Svitlana Achkasova & Olexandr Yagolnitskyi, 2022. "Assessing the Activities of Insurance Companies Due to the Disease of Private Pension," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 179-194.
    • Handle: RePEc:bas:econst:y:2022:i:5:p:179-194
    as

    Download full text from publisher

    File URL: https://www.iki.bas.bg/Journals/EconomicStudies/2022/2022-5/11_Daria-Davydenko.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ruslana Pikus & Anna Khemii, 2018. "Life Insurance Under Reforming The Pension Insurance System," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 4(4).
    2. Gene C. Lai & Hisashi Nakamura & Shinichi Yamamoto & Takau Yoneyama, 2021. "Adverse retention: Strategic renewal of guaranteed renewable term life insurance policies," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(4), pages 1001-1022, December.
    3. Nicolas Ettlin & Walter Farkas & Andreas Kull & Alexander Smirnow, 2020. "Optimal Risk-Sharing Across a Network of Insurance Companies," Swiss Finance Institute Research Paper Series 20-52, Swiss Finance Institute.
    4. Patrick M. Liedtke, 2021. "Vulnerabilities and resilience in insurance investing: studying the COVID-19 pandemic," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(2), pages 266-280, April.
    5. Ettlin, Nicolas & Farkas, Walter & Kull, Andreas & Smirnow, Alexander, 2020. "Optimal risk-sharing across a network of insurance companies," Insurance: Mathematics and Economics, Elsevier, vol. 95(C), pages 39-47.
    6. Bottan, Nicolas & Hoffmann, Bridget & Vera-Cossio, Diego A., 2021. "Stepping up during a crisis: The unintended effects of a noncontributory pension program during the Covid-19 pandemic," Journal of Development Economics, Elsevier, vol. 150(C).
    7. Nataliya Vnukova & Sergii Kavun & Oleh Kolodiziev & Svitlana Achkasova & Daria Hontar, 2020. "Indicators-Markers for Assessment of Probability of Insurance Companies Relatedness in Implementation of Risk-Oriented Approach," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 151-173.
    8. Ceballos, Francisco & Robles, Miguel, 2020. "Demand heterogeneity for index-based insurance: The case for flexible products," Journal of Development Economics, Elsevier, vol. 146(C).
    9. Umar Farooq & Adeel Nasir & Bilal & Muhammad Umer Quddoos, 2021. "The impact of COVID-19 pandemic on abnormal returns of insurance firms: a cross-country evidence," Applied Economics, Taylor & Francis Journals, vol. 53(31), pages 3658-3678, July.
    10. Li, Xin & Liu, Haibo & Tang, Qihe & Zhu, Jinxia, 2020. "Liquidation risk in insurance under contemporary regulatory frameworks," Insurance: Mathematics and Economics, Elsevier, vol. 93(C), pages 36-49.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wakker, Peter P. & Yang, Jingni, 2021. "Concave/convex weighting and utility functions for risk: A new light on classical theorems," Insurance: Mathematics and Economics, Elsevier, vol. 100(C), pages 429-435.
    2. Qiu, Ming & Jin, Zhuo & Li, Shuanming, 2023. "Optimal risk sharing and dividend strategies under default contagion: A semi-analytical approach," Insurance: Mathematics and Economics, Elsevier, vol. 113(C), pages 1-23.
    3. Yu, Fangping & Xiang, Zhiyuan & Wang, Xuanhe & Yang, Mo & Kuang, Haibo, 2023. "An innovative tool for cost control under fragmented scenarios: The container freight index microinsurance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    4. Muneer Shaik & Mohd Ziaur Rehman, 2023. "The Dynamic Volatility Connectedness of Major Environmental, Social, and Governance (ESG) Stock Indices: Evidence Based on DCC-GARCH Model," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 30(1), pages 231-246, March.
    5. Guerrero-Amezaga, Maria Elena & Humphries, John Eric & Neilson, Christopher A. & Shimberg, Naomi & Ulyssea, Gabriel, 2022. "Small firms and the pandemic: Evidence from Latin America," Journal of Development Economics, Elsevier, vol. 155(C).
    6. Gourlay, Sydney & Kilic, Talip & Martuscelli, Antonio & Wollburg, Philip & Zezza, Alberto, 2021. "Viewpoint: High-frequency phone surveys on COVID-19: Good practices, open questions," Food Policy, Elsevier, vol. 105(C).
    7. Juan Wu & Wenjing Yu & Xiaobing Liu & Yali Wen, 2022. "Analysis of Influencing Factors and Income Effect of Heterogeneous Agricultural Households’ Forestland Transfer," Land, MDPI, vol. 11(9), pages 1-17, September.
    8. Kibrom A Abay & Nishant Yonzan & Sikandra Kurdi & Kibrom Tafere, 2023. "Revisiting Poverty Trends and the Role of Social Protection Systems in Africa during the COVID-19 Pandemic," Journal of African Economies, Centre for the Study of African Economies, vol. 32(Supplemen), pages 44-68.
    9. Xinxin Ma, 2022. "Social Insurances and Risky Financial Market Participation: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(10), pages 2957-2975, August.
    10. Jose Cobian & Budy P. Resosudarmo & Alin Halimatussadiah & Susan Olivia, 2022. "Demand for index-based flood insurance in Jakarta, Indonesia," Departmental Working Papers 2022-12, The Australian National University, Arndt-Corden Department of Economics.
    11. Molina, Teresa & Cho, Yoon Y., 2024. "The Importance of Existing Social Protection Programs for Mental Health in Pandemic Times," IZA Discussion Papers 16737, Institute of Labor Economics (IZA).
    12. Strupat, Christoph, 2021. "The preserving effect of social protection on social cohesion during the COVID-19 pandemic: Evidence from Kenya," IDOS Discussion Papers 33/2021, German Institute of Development and Sustainability (IDOS), revised 2021.
    13. Woong Park & Hyunchul Ahn, 2022. "Not All Churn Customers Are the Same: Investigating the Effect of Customer Churn Heterogeneity on Customer Value in the Financial Sector," Sustainability, MDPI, vol. 14(19), pages 1-22, September.
    14. Schwab, Benjamin & Yu, Jisang, 2022. "Guaranteed Storage? Risk and Credit Constraints in the Demand for Postharvest Technology and Rice Seed Storage Decisions in Bangladesh," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322475, Agricultural and Applied Economics Association.
    15. Maria Carannante & Valeria D’Amato & Paola Fersini & Salvatore Forte & Giuseppe Melisi, 2022. "Disruption of Life Insurance Profitability in the Aftermath of the COVID-19 Pandemic," Risks, MDPI, vol. 10(2), pages 1-16, February.
    16. Xuelian Li & Shiu-Chieh Chiu & Jyh-Horng Lin & Yuxin Xie, 2024. "Assessing insurer guarantee cover and risk retention toward SDG 3: a structure-break down-and-out call valuation," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    17. Stampini, Marco & Medellín, Nadin & Ibarrarán, Pablo, 2023. "Cash Transfers, Poverty, and Inequality in Latin America and the Caribbean," IDB Publications (Working Papers) 13191, Inter-American Development Bank.
    18. Bufalo, Michele & Ceci, Claudia & Orlando, Giuseppe, 2024. "Addressing the financial impact of natural disasters in the era of climate change," The North American Journal of Economics and Finance, Elsevier, vol. 73(C).
    19. Martin Eling & Irina Gemmo & Danjela Guxha & Hato Schmeiser, 2024. "Big data, risk classification, and privacy in insurance markets," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 49(1), pages 75-126, March.
    20. Di Maio, Michele & Fasani, Francesco & Sciabolazza, Valerio Leone & Molini, Vasco, 2022. "Facing Displacement and a Global Pandemic: Evidence from a Fragile State," IZA Discussion Papers 15134, Institute of Labor Economics (IZA).

    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bas:econst:y:2022:i:5:p:179-194. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Diana Dimitrova (email available below). General contact details of provider: https://edirc.repec.org/data/ikbasbg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.