Estimation of the capacity of the Ukrainian stock market’s risk insurance sector

  • Received September 4, 2017;
    Accepted October 30, 2017;
    Published November 24, 2017
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/ins.08(1).2017.04
  • Article Info
    Volume 8 2017, Issue #1, pp. 34-47
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The purpose of the article is to determine the degree of financial interaction between the stock and insurance market, or, in other words, to determine the potential capacity of the stock market’s risk insurance sector for the Ukrainian insurance market. The authors examine the insurance not of all possible risks on the stock market, but only the most potentially important for the development of the stock market at this stage of economic development: insurance of professional risks of depositories and insurance of individual investments of individuals – participants of the stock market. In order to calculate the capacity of the stock market’s risk insurance sector in the context of the two above mentioned types, the authors apply the models that are widely used in the economic-mathematical analysis. For mathematical calculations we used 31 absolute indicators of the characteristics of the state of the stock and insurance markets, as well as some macroeconomic indicators. When forming an array of input data for mathematical calculations we used annual values of absolute indicators for the period 2005–2015 were used. For the adequacy of the received calculations the normalization of the selected indicators was carried out. All indicators were divided into two groups: stimulators and de-stimulators. The normalization of stimulator indicators was carried out by the method of natural normalization, and of de-stimulator indicators – according to the Savage formula. The capacity of the segment of the new type of insurance was determined by the authors as the maximum possible amount of insurance premiums that insurers can get in the process of implementing a new insurance product based on the current state of development of the insurance market. The capacity of the sector of the new type of insurance was presented as a function of the main component (an indicator that directly characterizes the created segment) and the corrective component (a set of indicators characterizing the segments created indirectly). The weight coefficients of the corrective component were determined by using the Fischer’s formula. As a result of the calculations, the authors obtained the data on the prospects of simultaneous introduction for the stock and insurance markets of such types of insurance as a professional liability insurance of depositories and an insurance of individual investors on the stock market.

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    • Fig. 1. Definition of the type of growth curve for the indicator of trade volumes on the stock market of Ukraine
    • Fig. 2. The real values of the volume of trades on the Ukrainian securities market and the estimated values of its capacity for the period of 2005–2015
    • Fig. 3. Determination of the type of growth curve for the indicator of gross insurance premiums for voluntary liability insurance in 2005–2015
    • Fig. 4. Determination of the type of growth curve for the indicator of gross insurance premiums for financial risk insurance in 2005–2015
    • Fig. 5. The ratio of capacity of insurance of depositories’ professional liability to the capacity of the stock and insurance markets
    • Fig. 6. The ratio of the volume of insurance of individual investments of physical persons on the stock market to the capacity of the stock and insurance markets
    • Fig. В. 1. Determination of the type of growth curve for the indicator of gross insurance premiums in 2005–2015
    • Fig. В. 2. The real values of the volume of gross insurance premiums and the estimated values of the insurance market’s capacity for the period 2005–2015
    • Table 1. Absolute indicators of the development of the stock and insurance markets, as well as the Ukrainian economy as a whole by groups
    • Table 2. Interim calculations to determine the type of growth curve for the volume of trade on the Ukrainian stock market in 2005–2015
    • Table 3. The results of calculations of the correction coefficient and the capacity of the Ukrainian stock market for the period 2005–2015
    • Table 4. Interim calculations to determine the type of growth curve of gross insurance premiums for voluntary liability insurance and gross insurance premiums for financial risk insurance in 2005–2015
    • Table 5. Results of calculations of corrective coefficients and the capacity of the segments of insurance of professional liability of depositories and insurance of individual investors on the stock market in 2005–2015
    • Table A.1. Information provision for the research of capacity of the sectors of insurance of depositories’ professional risks and insurance of individual investments of physical persons – participants of the stock market
    • Table B.1. The results of normalization of the input data array
    • Table В.2. Information provision for the study of the capacity of the Ukrainian insurance market in 2005–2015
    • Table В.3. Interim calculations to determine the type of growth curve for the volume of gross insurance premiums in 2005–2015
    • Table В.4. The results of calculations of the correction coefficient and the capacity of the Ukrainian insurance market for the period 2005–2015