CHALLENGES AND STRATEGIC PRIORITIES FOR THE DEVELOPMENT OF INVESTMENT INSURANCE IN UKRAINE

##plugins.themes.bootstrap3.article.main##

##plugins.themes.bootstrap3.article.sidebar##

Published: Dec 12, 2017

  Iryna Honcharenko

  Olena Berezina

Abstract

The purpose of the paper is to substantiate the feasibility of expanding the scope of investment insurance in Ukraine, taking into account its advantages over other types of insurance services as well as the possibility of minimizing the possible disadvantages. Methodology. The list of the research methods of the subject under consideration includes the monographic method, analysis, techniques of the abstract-logical method, etc. Results. The urgency of the article is that the disclosure of the internal potential of the insurance market in Ukraine should take place with the introduction or activation of modern insurance products capable of meeting several financial needs at once, not only of their consumers but of the state as a whole. The development of voluntary life insurance plays an important investment role in the country’s economy, therefore, at the moment, the need to develop new financial products aimed at increasing voluntary insurance is urgent. The share of life insurance services in the insurance market of Ukraine in dynamic is analysed. The purpose and positive consequences of expanding the segment of investment insurance are substantiated. Investment insurance as a financial product has both advantages and disadvantages. The benefits include the transparent structure of the insurance product, the choice of investment strategy, the possibility of obtaining increased investment returns while preserving the benefits of the insurance contract, preferential taxation of investment income, the existence of a guaranteed amount of payment in the contract, etc.; to the drawbacks – the lack of the possibility of early termination of the contract with the receipt of all the insurance premiums paid, the absence of a guarantee fund, guaranteed income, long-term contracts, limited range of people who can be insured. To enhance the use of investment insurance in Ukraine and to minimize these shortcomings, the prospects for the development of the investment insurance market are identified. Investment insurance in Ukraine has a high potential for active use and transformation into a popular insurance product. It is necessary to carry out further adaptation of products unit-linked to the structure and specifics of the domestic insurance market. The growth of the volume of investment insurance and, as a consequence, the expansion of the life insurance market as a whole, could become one of the most important factors in the development of the insurance industry in Ukraine in the near future. Practical implications. The main idea of the article was to justify the expediency of providing and using the investment insurance service in Ukraine, subject to minimize the shortcomings of this type of insurance and taking into account the prospects for its further development in the domestic financial market. Value/originality. The conducted research allowed getting some results, such as promising directions for the development of this type of financial product in the domestic insurance market.

How to Cite

Honcharenko, I., & Berezina, O. (2017). CHALLENGES AND STRATEGIC PRIORITIES FOR THE DEVELOPMENT OF INVESTMENT INSURANCE IN UKRAINE. Baltic Journal of Economic Studies, 3(5), 84-90. https://doi.org/10.30525/2256-0742/2017-3-5-84-90
Article views: 467 | PDF Downloads: 118

##plugins.themes.bootstrap3.article.details##

Keywords

investment, insurance, investment insurance, life insurance, unit-linked insurance, insurance products, insurance services.

References

Anant, Gupta (2015). Theoretical Analysis of the Mechanism of Unit Linked Insurance Policies in India. International Journal of Law and Legal Jurisprudence Studies, vol. 2(3). Retrieved from: http://ijlljs.in/wp-content/uploads/2015/04/Analysis-Unit-Linked-Insurance-Policies-Anant-Gupta-4th-Year-NLU-Odisha1.pdf (accessed 10 December 2017).

Berezina, O. Y. & Tkachenko, Yu. V. (2017). Hlobalne partnerstvo v paradyhmi staloho rozvytku: osvita, tekhnolohii, innovatsii [Global partnership in the sustainable development paradigm: education, technology, innovation] : monograph. Cherkasy: Chabanenko Yu.A., 524 p.

Ciumaș, Cristina &Chiș, Diana-Maria (2014). Pricing and Assessing Unit-Linked Insurance Contracts with Investment Guarantees. Retrieved from: http://steconomiceuoradea.ro/anale/volume/2014/n1/095.pdf (accessed 2 September 2017).

Derzhavna sluzhba statystyky Ukrainy (2017). Informatsiia pro stan i rozvytok strakhovoho rynku Ukrainy [Information on the state and development of the insurance market of Ukraine]. Retrieved from: https://nfp.gov.ua/content/informaciya-pro-stan-i-rozvitok.html (accessed 14 December 2017).

Proekt Zakonu Ukrainy «Pro vnesennia zmin do Zakonu Ukrainy «Pro strakhuvannia» (2009). [Draft Law of Ukraine “On Amendments to the Law of Ukraine” On Insurance”] Retrieved from: http://odo-msk.com.ua/content/documents/1/66/files/ zminy_do_zakonu_pro_strahuvannya.pdf. (accessed 14 November 2017).

Feshchenko, V. (2013). Osoblyvosti investytsiinoho strakhuvannia unit-linked ta peredumovy yoho vprovadzhennia v Ukraini [The features of investment insurance unit-linked and prerequisites of its implementation in Ukraine] Retrieved from: http://www.ufin.com.ua/analit_mat/strah_rynok/165.htm (accessed 7 October 2017).

Frantz Christophe, Chenut Xavier &Walhin Jean-François (2003, January). Pricing and capital allocation for unitlinked life insurance contracts with minimum death guarantee. Retrieved from: http://www.ressources-actuarielles.net/EXT/ISFA/1226.nsf/0/995e80d0554c729fc1256dcc003bee84/$FILE/garantie%20plancher%20 (AFIR2003).pdf (accessed 17 July 2017).

Hochreiter Ronald, Pflug Georg & Paulsen Volkert (2005, May) Designing and managing unit-linked life insurance contracts with guarantees. Retrieved from: http://www.uni-muenster.de/Stochastik/paulsen/Publikationen/insurance.pdf (accessed 29 July 2017).

Honcharenko, I. G. (2014). Trendy vitchyznianoho strakhovoho rynku v umovakh staloho rozvytku [The trends in the domestic insurance market in terms of sustainable development] Publisher Stuttgart (Germany), 290 p.

Honcharenko, I. G. (2015). Efektyvnist systemy strakhovoho ryzyk-menedzhmentu v umovakh kryzovykh yavyshch [The efficiency of system insurance risk-management in conditions of crisis] Vestnik GGTU. Economic science, vol. 2, pp. 85-91.

Honcharenko, I. & Berezina, O. (2016). Cooperation of the bank and insurance business as an effective model: history and present day. Organizational and economic mechanisms of development of the financial system: collective monograph / edited by M. Bezpartochnyi. Riga : Landmark SIA, pp. 83-92.

Honta, O. I., Dubyna, M. V., Tunik, M. V. &Yefymenko, A. Yu. (2014). Perspektyvy rozvytku prohram strakhuvannia unit-link v Ukraini [Prospects of development of insurance of unit-link in Ukraine]. Bulletin of Chernihiv State Technological University. Series: Economic Sciences, vol. 1, pp. 150-158.

Kreidych, I. M. (2009). Osoblyvosti investytsiinoho strakhuvannia v Ukraini [The peculiarities of the investment of insurance in Ukraine]. Investments: practice and experience, vol. 10, pp. 4-8.

Moller, Thomas (1998). Risk-Minimizing Hedging Strategies for Unit-Linked Life Insurance Contracts. ASTIN Bulletin: The Journal of the IAA, vol. 1(28), pp.17-47. Retrieved from: https://www.casact.org/library/astin/vol28no1/17.pdf (accessed 5 November 2017).

Preda, Ana &Monea, Mirela (2011). The Unit-Linked Insurance-A form of Long Term Economizing in the context of Global Crisis. Annals of the University Of Craiova Economic Sciences, vol. 39, pp. 251-258. Retrieved from: http://feaa.ucv.ro/annals/ v4_2011/0039v4-031.pdf (accessed 17 July 2017).

Rajagopalan, R. &Pai, T. A. (2006). Unit-Linked Insurance Policies in the Indian Market-A Consumer Perspective. Retrieved from: https://www.actuariesindia.org/downloads/gcadata/8thGCA/Unit-Linked%20Insurance%20Policies%20in%20the%20Indian%20market-%20A%20Con%E2%80%A6.pdf (accessed 14 December 2017).

Stasevskiy, A. (2012). Investytsiine strakhuvannia zhyttia unit-linked-nova perspektyva dlia ukrainskoho rynku [Investment life insurance unit-linked-a new perspective for the Ukrainian market]. Insurance business, vol. 4, pp. 46-47.

Straub, Martin (2011, December). Unit-Linked Life Insurance: Cost Drivers, Hidden Payments, and the Tax-Deferral Argument. Retrieved from: http://www.envisage.ch/fileadmin/documents/Unit_linked_life_insurance._Benefits__Cost_drivers__hidden_payments_and_the_tax_deferral_argument.pdf (accessed 17 July 2017).

Zhegalova, E. V. (2014). Tendentsyy y perspektyvы razvytyia strakhovanyia zhyzny v Rossyy [The tendencies and perspectives for development of the life insurance in Russia]. Regional development, vol. 2, pp. 76-79.