ESTIMATION OF RISKS OF INSURANCE COMPANIES USING INTEGRATED METHODS OF ANALYSIS

Nataliya Kazakova1*, Margarita Melnik2 and Cholpon Nuralieva3
1Doctor of Economics, Professor, Head of Financial Research Center, Plekhanov Russian University of Economics, axd_audit@mail.ru
2Doctor of Economics, Professor, Department of Accounting, Analysis and Audit, Financial University of the Russian Federation Government, mmargarita@fa.ru
3Doctor of Economics, Professor, Department of Accounting, Analysis and Audit, Kyrgyz Russian Slavic University named after the First President of Russia B.N.Yeltsin, nur-cholpon@mail.ru
*Corresponding author

Abstract

The insurance business is subject to specific risks, for the assessment and forecasting of which requires an adapted toolkit, including a system of indicators, methods for their calculation and evaluation. For the insurance industry, a reliable scientifically based risk assessment methodology will allow to diagnose in a timely manner factors that can lead to negative consequences or unfavorable circumstances that can lead to non-fulfillment of the assumed obligations to the insured and to develop in the most timely manner the most effective model for making managerial decisions. The methodological platform of this study was such risk analysis methods as sensitivity analysis, decision tree, scenario method, Monte Carlo method, rating evaluation. The information base of the research includes indicators of financial statements of insurance companies and credit ratings of well-known rating agencies. The result of the study is a comprehensive methodology for the integrated assessment and forecasting of risks of insurance companies, based on a system of financial indicators weighted by the probability of default, as well as non-financial indicators that take into account the company's rating and unprofitable business lines. Scientific results are tested on the example of one of the largest Russian insurance companies.

Keywords: insurance company, risk assessment, rating.