Assessment of the Stability of Insurance Companies: The Case of Baltic Non-Life Insurance Market
Economics and Business 2018
Ilze Zariņa-Cīrule, Irina Voronova, Gaida Petere

The study gives an overview of the Baltic non-life insurance market. The purpose of the research is to summarise stability statistics on solvency ratios, risk profiles and capital surplus, which was contained in Solvency and Financial Condition reports (SFCR) in 2016 published first time by non-life insurance companies in European Union and Baltic market (Latvia, Estonia, and Lithuania). Solvency II came into effect in 2016, and these reports have been prepared using the new requirements of the Solvency II framework. All non-life insurance companies are required to have eligible own funds at least equal to solvency capital requirement (SCR) in order to avoid supervisory intervention (own funds divided by SCR are required to be at least 100 %). The SCR is based on well known risk measure value at risk with 99.5 % confidence level over a one-year time horizon. Baltic non-life insurance companies were strong capitalized (median 155 %) in 2016. It means that all Baltic companies can survive even if 1 in 200 years events have occurred although Baltic solvency coverage ratio is lower than the median ratio in European Union (209 %). For Latvian non-life insurance market, solvency ratio median is the lowest in European Union comparing by countries. The authors have analysed the historical development of the market and have calculated financial ratios, Gini’s concentration index, as well as dissimilarity index. The authors have investigated the current and future internal and external risks and issues for the Baltic non-life insurance market, such as political environment, low-yield environment, and market competition due to new mergers and acquisitions (M&A) activities, and a new rule for accounting for insurance companies IFRS17.


Atslēgas vārdi
Capital management, non-life insurance, risk management, Solvency II Directive.
DOI
10.2478/eb-2018-0008
Hipersaite
https://www.degruyter.com/view/j/eb

Zariņa, I., Voronova, I., Pettere, G. Assessment of the Stability of Insurance Companies: The Case of Baltic Non-Life Insurance Market. Economics and Business, 2018, Vol. 32, No. 1, 102.-111.lpp. ISSN 2256-0386. e-ISSN 2256-0394. Pieejams: doi:10.2478/eb-2018-0008

Publikācijas valoda
English (en)
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