ASSESSMENT METHODS OF INSURANCE RISK AFFECTING THE SOLVENCY OF THE INSURANCE COMPANY
The article examines the main methods and techniques of risk assessment that have a significant impact on the solvency of insurance organizations. Risk assessment is one of the most important elements in the risk management process and is a fairly complex process, but a good assessment of the potential risk creates the prerequisites for successful risk management. It should be noted that, first of all, there is a need to define a risk assessment strategy, i.e., the principle of the measure and the risk assessment methods. Note that a risk measure is defined as a function (mapping) of a set of random numbers that represents the solvency level of a company. Various risk measures used to date have been analyzed: asymmetric factor; probability of loss; risk cost (VaR); delta-normal method; Marginal VaR, VaR increments; Relative VaR, expected deficit, entropy risk measure, super hedging, bankruptcy probability etc. The methods of insurer’s financial risks management constitute a system of methods that allow to predict the occurrence of risky events in the process and identifying different ways to avoid, minimize and transfer, and take measures to reduce the impact of such events on the insurer. The methods of risk assessment that are most common in practice have been discussed and analysed: Preliminary risk analysis; Technique "what if?" or stress testing; Event Tree Analysis (ETA); Monte Carlo Method (Monte Carlo simulation); Bayesian networks; Method "Event - Consequence" (Hazard and Operability research). Thus, the risk manager, knowing the quality and quantity of the data available for analysis, can determine which risk analysis method is most appropriate in each case.
2. Yukhumenko, V.М. (2017). Strakhovui rynok Ukrajiny v konteksti dprovadgennya vymog Solvency II [Insurance market of Ukraine in the context of the introduction of requirements Solvency II]. Naukovyi visnyk Uzhgorodskogo derzhavnogho universytetu. Ser.: Mezhdunarodni ekonomichni vydnosyny ta svitive gospodarstvo – Scientific bulletin of Uzhgorod state university. Ser.: International economic relations and the world economy, is. 12, part 2, 190 – 193 [in Ukrainian].
3. Yaranceva, K.A. (2015) Sovremennye popylyarnye metody otsenki riskov v strakhovanii [Modern popular methods of risk assessment in insurance]. Strakhovoye delo – Insurance business, 4, 48–53. Retrieved at: https://rucont.ru/efd/610618. [in Russian].
4. Melnikov, A. Risk analysis in ﬁnance and insurance. Retrieved from: https://www.crcpress.com/Risk-Analysis-in-Finance-and-Insurance-Second-Edition /Melnikov/p/book/9781420070521.
5. Kuznetsovа, N.V. (2018). Мetody i modeli analizy, otsinyvannya ta prognozyvannya rysykiv y finansovykh systemakh [Methods and models of analysis, assessing risks in financial systems]. Doctor’s thesis. Kyiv [in Ukrainian].
6. Belevets, М.S. & Bidyuk, P.І. & Kuznetsovа, N.V. (2015). Rozrobka cyctemnogo pidhoda do menedgmenty ryzykiv [Developing a systems approach to risk management]. Systemni nayky ta kibernetyka – Systemic sciences and cybernetics, 1, 30 – 48. Retrieved at : http://mmsa.kpi.ua/sites/default/files/ssc/issues/ssc_1_2015.pdf [in Ukrainian].