CRITERIA FOR ORGANIZATION OF INSURANCE COMPANIES

Abstract

This article considered the main criteria for organising insurance companies and factors that have an impact on the financial stability of insurance companies to improve their performance. Conducted grouping of factors influencing the activities of the insurer. The criteria of organisation of insurance companies' finances to ensure financial stability are studied, among which are the following: sufficient equity, optimal tariff policy, balanced insurance portfolio, availability of safe and effective reinsurance program, sufficient insurance reserves for future payments, optimal insurance reserves placement program and a high level of solvency of the insurance company. Thus, the existence of insurance as a type of business can meet the diverse needs of society, which is manifested through the provision of guarantees, loans, investments in the state economy, etc. The capital of the insurer, unlike other entities, by sources of formation can be divided into: own, attracted and borrowed. Own equity, together with insurance reserves, constitutes the financial potential of insurance companies and is the basis for ensuring financial stability throughout the life cycle. As for borrowed capital, its impact on the financial stability of insurance companies is manifested only on the negative side.Thus, we can conclude that the peculiarities of the organisation of the finances of insurance companies leave their mark on the capital structure, that must be taken into account when managing the financial stability of insurance companies.Therefore, the conduct of insurance activities requires the maintenance of a level of financial stability that would provide the insurer with all the necessary financial resources to cover its obligations at any time and ensuring a sufficient level of income in order to maintain a competitive advantage in the insurance market. Therefore, today the urgent task is to develop modern methods of assessment, and analysis of the financial strength of the insurance company, determining the degree of influence of factors on it, and the implementation of measures to improve its condition.Accordingly, the insurance company's mission should not be about making a profit, and consist in social security of citizens, social protection. Accordingto this, such a manifestation of financial relations as insurance should develop.