Economy of Ukraine
Published since September 1958
Login

№ 4/2019

Ekon Ukr. 2019 (4): 18–28
https://doi.org/10.15407/economyukr.2019.04.018

FINANCE. TAXES. CREDIT

УДК 368.01

IGNATYUK Anzhela1, SHOLOIKO Antonina2

1Taras Shevchenko National University of Kyiv, Research ID : http://www.researcherid.com/rid/L-4078-2017
OrcID ID : https://orcid.org/https://orcid.org/0000-0002-9103-6943
2Taras Shevchenko National University of Kyiv
OrcID ID : https://orcid.org/https://orcid.org/0000-0003-1239-4281


SECURITY OF UKRAINE’S INSURANCE MARKET UNDER FINANCIAL GLOBALIZATION: THREATS AND DIRECTIONS OF REGULATION


The main purpose of any insurance market is to ensure the continuity of the production process and the formation of sources of investment resources for the development of the country’s economy. However, in a context of financial globalization, this function can be unrealized due to the increased vulnerability of insurance markets to the impact of global crisis and capital outflow through the processes of mergers and acquisitions of insurance companies, foreign investments, international reinsurance, etc. This generates threats to the security of Ukraine’s insurance market. And hence, the purpose of the article is to develop recommendations on how to regulate the safety of Ukraine’s insurance market on the basis of an analysis of the manifestations of financial globalization in the world’s insurance markets and the identified threats.
The authors consider financial globalization as the formation of a global financial market that can be defined as a market in which international financial intermediaries (banks, insurance companies, etc.) sell financial services worldwide.
The processes of financial globalization cause such security threats to the insurance market, as: acquisition by foreign insurers of national insurance companies, outflow of investment resources abroad, growth of dependence on external reinsurance and others.
To strengthen the security of Ukraine’s insurance market under financial globalization, the following directions of regulation are proposed:
(i) to establish requirements for external investments of insurers not only in the part of securities of foreign issuers, but also in relation to other assets, which can be represented by insurance reserves;
ii) to carry out ongoing monitoring of security indicators of the insurance market: the share of insurance payments belonging to reinsurers-non-residents in gross insurance payments; the share of foreign capital in the authorized capital of insurance companies; market share of foreign insurance companies;
iii) to increase the independence from external reinsurance, the capitalization of Ukrainian insurers should be increased on the basis of the introduction of Solvency II principles for the growth of the reinsurance capacity of the national insurance market and stimulation of the export of reinsurance services.


Keywords:security of the insurance market; mergers and acquisitions; insurtech; domestic and foreign investments; reinsurance

Бібл. 14; рис. 1; табл. 4

Article original in Ukrainian (pp. 18 - 28) DownloadDownloads :487
The article was received by the Editorial staff on August 21 , 2018

References

1. Arestis Ph., Basu S., Mallick S. Financial globalization: the need for a single currency and a global central bank. Journal of Post Keynesian Economics, 2005, Vol. 27 (3), pp. 507-531.

2. Bazilevich V. Sovremennaya ekonomicheskaya teoriya: v poiskakh novoi paradigmy [Modern economic theory: searching a new paradigm]. Visnyk Kyivs'koho natsional'noho universytetu imeni Tarasa Shevchenka. Ser.: Ekonomika - Bulletin of Taras Shevchenko National University of Kyiv. Ser.: Economics, 2013, Iss. 146, pp. 5-7 [in Russian].
doi.org/10.17721/1728-2667.2013/146-5/1

3. Hrazhevska N.I., Trokhymenko V.I. Instytutsiina zmina svitovoi ekonomiky za umov finansovoi globalizatsii [Institutional change of the world economy under financial globalization]. Finansy Ukrainy - Finance of Ukraine, 2013, No. 5, pp. 58-68 [in Ukrainian].

4. Levy-Yeyati E., Williams T. Financial globalization in emerging economies: much ado about nothing?, available at: www.brookings.edu/wp-content/uploads/2016/06/0603_financial_globalization_yeyati.pdf.

5. Prymostka L.O., Chub O.O. Finansova globalizatsiya: sutnist', formy proyavu, naslidky [Financial globalization: sense, forms of display, consequences]. Finansy, oblik i audyt - Finance, accounting and auditing, 2011, No. 18, pp. 172-183 [in Ukrainian].

6. Häusler G. The globalization of finance, available at: www.imf.org/external/pubs/ft/fandd/2002/03/hausler.html.

7. Khominich I.P. Finansovaya globalizatsiya [Financial globalization]. Bankovskie uslugi - Banking services, 2002, No. 8, pp. 2-13 [in Russian].

8. Schmukler S.L. Benefits and risks of financial globalization: challenges for developing countries, available at: siteresources.worldbank.org/DEC/Resources/BenefitsandRisksofFinancialGlobalizationSchmukler.pdf.

9. Zaletov O.M. Inozemnyi kapital na strakhovomu rynku Ukrainy ta ioho rol' [Foreign capital in Ukraine's insurance market and its role]. Strakhova sprava - Insurance business, 2018, No. 2, pp. 24-25 [in Ukrainian].

10. Filonyuk A.F., Zaletov A.N. Strakhovaya Industriya Ukrainy: Strategiya Razvitiya [Insurance Industry of Ukraine: Development Strategy]. Kiev, "Bizon" international agency, 2008 [in Russian].

11. Nechyporuk L.V. Ubezpechennya strakhovoho rynku yak vymoha finansovoi globalizatsii [Ensuring the safety of the insurance market as a requirement of financial globalization]. Proceedings from: Vektory rozvytku finansovoho potentsialu sub"ektiv hospodaryuvannya. Mizhnar. nauk.-prakt. konf. [Vectors of development of financial potential of business entities. International scientific and practical conference]. Kharkiv, V.N.Karazin Kharkiv National University 2014, pp. 90-103 [in Ukrainian].

12. Pikus R.V. Rozvytok strakhovoho rynku v umovakh globalizatsii [Insurance market development in the conditions of globalization]. Visnyk Kyivs'koho natsional'noho universytetu imeni Tarasa Shevchenka. Ser.: Ekonomika - Bulletin of Taras Shevchenko National University of Kyiv. Ser.: Economics, 2011, Iss. 126, pp. 15-18 [in Ukrainian].

13. Shirinyan L.V., Shirinyan A.S. Metodolohiya kompleksnoi otsinky vidkrytosti rynkiv bankivs'kykh i strakhovykh posluh Ukrainy [Methodology for a comprehensive assessment of a market openness of the banking and insurance services in Ukraine]. Ekonomika Ukrainy - Economy of Ukraine, 2017, No. 12, pp. 34-51, available at: www.economukraine.com.ua/index.php?id=13748&show=news&&newsid=110249 [in Ukrainian].

14. Kovtun N., Ignatyuk A. Multidimensional assessment of globalization at the level of a company (sectors). Procedia Economics and Finance, 2014, Vol. 16, pp. 690-702, available at: www.sciencedirect.com/science/article/pii/S2212567114008570.
doi.org/10.1016/S2212-5671(14)00857-0