The company's management depends on how efficiently its existing competitive
potential will be used.
Financial reliability of insurance company, that is first of all determined by the
level of her solvency, that must be supported constantly, depends on rational
possession, bringing in and disposing of financial resources.
Solvency means possibility, ability of insurer to answer after the obligations. The
coefficient of solvency settles accounts as attitude of property asset of enterprise
toward the result of balance sheet and shows specific gravity of property asset in the
lump sum of the facilities advanced in his activity. Minimum (normative) value of
coefficient of solvency > 0,5. The higher the solvency ratio, the higher the level of
financial security of the insurer.
The financial reliability of the insurer is also ensured by such a tool as reinsurance.
The purpose of reinsurance is that the insurer transfers the share of risk to the reinsurer
and continues to be fully liable to insure. Therefore determining size of own
maintenance of obligations has a very large value. If a size of obligations will be too
high, then in case of offensive of accident insured for an insurer there can be not enough
money for coverage of losses of insure. The share of reinsurance premiums must be
less than 50%, which characterizes independence of insurance organization from
reinsurer. Financial reliability of insurer is interpreted as his possibility to execute the
insurance obligations accepted on the contracts of insurance and reinsurance in case of
influence of unfavorable factors. Therefore proof financial reliability of insurance
operations gives an opportunity to the insurer to execute all obligations under any
unfavorable circumstances. Proof financial reliability of insurance operations gives an
opportunity to the insurer to execute all obligations under any unfavorable
circumstances.
Factors that provide financial reliability of insurance company: sufficiency of own
funds (capital); validity and prudence of the tariff policy; balanced of insurance
portfolio; sufficiency of insurance reserves.
Taking into account the specific of insurance activity of risk companies, there
must be the peculiar increased liquidity them. Basis of liquidity is provided by quality
management monetary resources. In general under liquidity it follows to understand
possibility of company quickly to convert different assets into monetary resources.
Insurance companies with the aim of providing of liquidity must form balance
between assets and obligations and necessarily to keep a certain reserve of money. The
supply of monetary resources needs to the companies for coverage of urgent insurance
and uninsurance obligations, and also in an order to cover sudden requirements in
monetary resources.
The Ukrainian financial market in the conditions of present time can not be
defined as stable, that is why the Ukrainian insurance companies hold on the accounts
in banks substantial enough amounts of money moneys. But in the future, after the
achievement of final financial stability, more attention must be spared the question of
management monetary resources, as investments of different financial assets can give
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