Financial risks of the stock market: opportunities and specifics of their insurance

The fact that the accumulated investment potential (IP) of insurance companies (IC) does not have a significant impact on the processes of economic growth in Ukrainian practice actualizes the task of researching the practice of investing in the activities of domestic insurers. The purpose of the study is to find out, classify and highlight the main factors that influence the formation of the Ukrainian IC’ IP and give recommendations for overcoming a number of related difficulties. According to the results of investigation of the Ukrainian insurance industry development trends in 2011–2018, it was concluded that rates of their IP accumulation are insufficient. There is a decrease in the aggregate value of insurers’ investment assets and a reduction in the composition of investment attractive financial instruments. Low efficiency and simplification of investment strategies of IC are noted. The factors that exert a stimulating and inhibitory influence on the investment processes in the Ukrainian insurance market were identified. Ways and tools were proposed to strengthen the effect of incentive factors and eliminate or minimize the effect of the considered restrictive factors that can be used in the practice of state regulation of the insurance industry of the country. Considering the examined factors should allow the state regulators making more effective decisions to improve the investment activity of insurers and enhance its importance in the development of the national economy.

Section: Discussionmentioning

confidence: 99%

Stimulating and limiting factors for the growth of investment potential of Ukrainian insurance companies

Cherkasova

Kalaitan

Rushchyshyn

et al. 2020

Momentum and contrarian effects in the Ukrainian stock market: case of daily overreactions

Plastun

Strochenko

Zhmaylova

et al. 2020

This paper examines momentum and contrarian effects in the Ukrainian stock market after one-day abnormal returns. To do this, UX futures data over the period 2010–2018 are used. The following hypotheses are tested: H1) hourly returns on overreaction days differ from hourly returns on normal days, H2) there are price patterns on overreaction days, and H3) to test these hypotheses, visual inspection and average analysis are used, as well as t-tests, cumulative abnormal returns, and trading simulation approaches. The results suggest that there are statistically significant differences between intraday dynamics during the usual days and the overreactions day. There is a strong momentum effect present on the day of overreaction: prices tend to change only in the direction of the overreaction during the whole day. The fact of the overreaction becomes clear after 13:00-14:00. This gives a lot of time to explore the momentum effect in the day of overreaction. On the day after the overreaction, prices tend to go in the opposite direction: contrarian pattern is detected, which is in line with the overreaction hypothesis. Based on detected price patterns, rules of trading and trading strategies for the Ukrainian stock market are developed. Momentum Strategy (based on price patterns on the day of overreaction) generates several successful trades; close to with 90%, and their number being is profitable (trading results differ from the random ones – confirmed by t-tests). Contrarian Strategy (based on price patterns on the day after the overreaction) demonstrates low efficiency, and results do not differ from random trading.

Innovations in the insurance market of a developing country: Case of Ukraine

Yehorycheva

Fysun

Hudz

et al. 2020

Modern insurance business, including in developing countries, is associated with the introduction of innovations. The purpose of this paper is to clarify the features of the insurance market’s innovation in Ukraine by reviewing the literature and analytical data on the market as a whole and its individual participants. The results show that innovations implemented in the insurance market can be classified according to certain characteristics, which provides opportunities for its empirical study. The analysis reveals that the peculiarities of the innovative development of the Ukrainian insurance market are determined by many factors, among which digitalization and increased risks due to the COVID-19 pandemic are the main ones today. Based on the analysis of leading insurance companies’ practice, it is concluded that they implement only a limited amount of innovations, mainly of incremental and combinatorial types, and do not actively use modern communication channels with consumers. The results highlight the need for insurance and FinTech companies to cooperate in the innovation ecosystem, which is still being formed in the Ukrainian insurance market. The study also considers the possibility of using a system of indicators to assess the innovativeness of insurance companies.