The economic essence of the definition "financial potential of the insurer"

Bondarenko Pavel
Senior Lecturer, Department of Finance, Banking, Insurance, and Stock Market, Odessa National University of Economics, Odessa, E-mail: pavel.bondarenko@gmail.com, ORCID ID: https://orcid.org/0000-0002-8000-1913

Cite this article:

Bondarenko P. (2023) The economic essence of the definition "financial potential of the insurer". Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Ekonomichna sutnist definitsii "finansovyi potentsial strakhovyka"; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 5-6 (306-307), pp. 41-46.

Abstract

The purpose of the article is to determine the economic essence of the definition "financial potential of the insurer". The paper proves that the definition of "financial potential of the insurer" has a multifaceted measurement and is not reduced to only monetary funds, as it is understood in modern scientific literature. Properties of an insurer's financial potential include: the ability to preserve the asset's value, the ability to quickly transform into another asset, etc. Performance of a regulatory function (meaning compliance with the established requirements of the legislation of a certain country where the insurer operates), for example, maintaining the level of solvency, stability, structure of reserve investments, etc., becomes a criterion for effective management of the formation and use of financial potential. The research methodology is defined as a systematic approach, analysis and synthesis. Based on the analysis of scientific views on the definition of the insurer's financial potential, a proper definition was given taking into account the specifics of insurance activity. The practical significance of the results lies in the possibility to build a system of managing the insurer's financial potential based on the obtained results. The insurer's financial potential is a prerequisite for its successful activity on the market. The size of the insurance company's financial potential depends on the quantity and quality of its financial resources, taking into account the above definitions. Taking into account the above, the need for further research into this definition becomes obvious. The study of the concept of "financial potential" has scientific and practical significance for the economic activity of all economic entities, the state of a particular industry, the economy of a particular region, and for the country as a whole.

Keywords

potential of the enterprise, financial potential of the insurer, types of potential of the insurer.

JEL classification: G220, G290; DOI: 10.32680/2409-9260-2023-5-6 -306-307-41-46

UD classification: 368.1

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