DETERMINING THE EFFECT OF CAPITAL ADEQUACY ON THE FINANCIAL STABILITY OF AN INSURANCE COMPANY
Journal Title: Економіка розвитку - Year 2014, Vol 70, Issue 2
Abstract
The essence of the concept "financial stability" and the main approaches to the assessment of the financial stability of an insurance company are disclosed. The basic conditions for ensuring a sufficient level of financial stability are considered. The assessment of financial stability was made on an early warning test basis, and assessment of capital adequacy was conducted in accordance with current legislation and the requirements of Solvency II through the calculation of the solvency ratio (SR). Relationship between these factors and the level of financial stability of a company was evaluated using correlation and regression analysis, which confirmed the hypothesis of an association. A conclusion was drawn that insurance companies must pay considerable attention to the terms of financial stability, such as capital adequacy, and switch to the international standards for its evaluation.
Authors and Affiliations
V. Uspalenko , Y. Podzolkova
Keywords
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