Governance of factors for the regional insurance market development (evidence from Russia)

Кузнецова, Н. П.; Chernova, G. V.; Прокопьева, Е Л; Boldyreva, Natalja

doi:10.21511/ppm.17(3).2019.39

Cited by 2 publications

(3 citation statements)

References 16 publications

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“…It is commonly known that in order to obtain an insurance license, i.e., to be able to start an insurance business, the legislation established a minimal amount of authorized capital that the insurer must have at the start of its business. It is precisely because this capital amount provides the actual opportunity for an insurance services provider to operate, it is logical to consider it the fixed capital of an 1 2021 is excluded from analysis as an uncharacteristic year due to the pandemic.…”

Section: The Main Hypothesismentioning

confidence: 99%

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Dynamic Maintenance of Solvency of the Russian Insurance Companies: the Evidence from Russian Insurers

Tsvetkova

2023

КФ

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The Russian economy is facing sanctions pressure, resulting in weakening business relations with foreign insurers. Medium-sized insurance companies, targeting regional economic entities, play a crucial role in the insurance market. To improve the efficiency of Russian insurance, the number of medium-sized companies operating in regional markets must increase. To regulate their capitalization, special conditions must be developed, focusing on capital adequacy requirements and financial stability parameters. While earlier research has examined what factors might impact profitability growth, the investment income factor in maintaining corporate financial stability has been underexplored. This paper aims toexplore conditions for improving insurers' financial soundness through growth of a company's internal capitalization. Medium-sized insurance companies often struggle to meet regulators' minimum capital requirements (a core variable linked with companies’ capitalization) leading to potential market shrinkage. Our hypothesis is that it possible to create a financial reserve that meets the regulator’s increasing equity requirements without raising additional external investments. This study examined the factors which impacted the growth of medium-sized insurance companies operating in the emerging markets. Operating results of seven randomly selected medium-sized insurance companies in 2014–2022 were used forthe analysis. The paper suggests that institutionalization of insurance companies' capitalization is crucial to minimize the risk of capital inadequacy. The study contributes to our understanding of how medium-sized insurance companies can be governed and suggests a way to increase their capitalization.

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Section: The Main Hypothesismentioning

confidence: 99%

“…However, often insurers of medium-sized companies are unable to adhere to the regulator's minimal capital requirements. This may force medium-sized companies out of the market and cause abrupt market shrinkage in spite of a significant potential of these companies to develop the sector of economy in which they operate [1].…”

Section: Introductionmentioning

confidence: 99%

Dynamic Maintenance of Solvency of the Russian Insurance Companies: the Evidence from Russian Insurers

Tsvetkova

2023

КФ

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“…Different classifications of development factors of regions and their insurance markets are also offered (Kuzmenkova, 2016;Pchela, 2016). Vorontsov (2014), Kuznetsova et al (2019), Tarasova and Voskovskaya (2018) agree that the sustainable development of individual regions depends on all-Russian and regional factors.…”

Section: Literature Reviewmentioning

confidence: 99%

Insurance instruments in risk management of the manufacturing sector of a region: the case of the Republic of Khakassia (Russia)

Прокопьева

Chernova

Кузнецова

et al. 2020

Investment Management and Financial Innovations

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Socio-economic development of a region is based on its production capacity. However, most regions in Russia are characterized by financial instability of local enterprises and the lack of a balanced structure of the regional economy. Insurance is an instrument of financial protection against risks, and its effective functioning is important for the development of the manufacturing sector, especially in depressed regions.This paper aims to highlight the mechanisms for increasing the production capacity of a region and reducing business risks with the help of insurance instruments and to provide appropriate recommendations for the development of the insurance market. This is planned to be achieved on the basis of analysis and processing of existing scientific research in this field and statistical materials.For this, a typology of regions was developed, which reflects the level of production in the region and is important in terms of developing the regional insurance market. This allows assessing the impact of insurance coverage in the region on the development of its production capacity. The proposed typology allows determining the causes of production inefficiency. The conformity of the development of the regional insurance market to the needs for insurance coverage of the production sector in the region was assessed. The identified imbalance between the provision of insurance coverage and the need for it allowed demonstrating an additional need for insurance, as well as working out a program for its development.The obtained results are illustrated using the example of the Republic of Khakassia, a constituent entity of the Siberian Federal District of the Russian Federation. To implement risk management in the manufacturing sector, schemes of interaction between insurance market participants using commercial and non-commercial insurance are proposed. AcknowledgmentThe paper was written under the grant from the Russian Foundation for Basic Research – Development of a Methodology for Green and Infrastructure Investment by Institutional Investors in the Context of Pension Reforms.

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Governance of factors for the regional insurance market development (evidence from Russia)

Cited by 2 publications

References 16 publications

Dynamic Maintenance of Solvency of the Russian Insurance Companies: the Evidence from Russian Insurers

Dynamic Maintenance of Solvency of the Russian Insurance Companies: the Evidence from Russian Insurers

Insurance instruments in risk management of the manufacturing sector of a region: the case of the Republic of Khakassia (Russia)

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