Petruk O., Doctor of Economic Sciences, Professor of Department of Finance and Crediting, Zhytomyr Polytechnic State University, Zhytomyr, Ukraine

ORCID ID: 0000-0002-5351-5679
e-mail: petruk6@gmail.com

Polchanov A., Doctor of Economic Sciences, Associate Professor, Associate Professor of Department of Finance and Crediting, Zhytomyr Polytechnic State University, Zhytomyr, Ukraine

ORCID ID: 0000-0001-6019-9275
e-mail: polchanov@gmail.com

Novak O S., PhD (Economics), Associate Professor of Department of Finance and Crediting, Zhytomyr Polytechnic State University, Zhytomyr, Ukraine

ORCID ID: 0000-0002-5671-0306
e-mail: novak_os@ukr.net

Diachek S., PhD (Economics), Associate Professor of Department of Finance and Crediting, Zhytomyr Polytechnic State University, Zhytomyr, Ukraine

ORCID ID: 0000-0003-2061-9938
e-mail: djacheksvetlana@ukr.net

Financial Model of Activity of the Regional Division of the Insurance Company

Abstract. Introduction. The article examines the issue of assessing the feasibility of investment in the development of regional divisions of insurance companies based on the development of a financial model of the regional division. The methodological basis of the study were general and special research methods, including methods of theoretical generalization, analysis, synthesis, comparison, as well as methods of financial modelling. The information base of the study was the data of the National Bank of Ukraine and the research «Insurance TOP» on the performance of regional divisions of insurance companies in Ukraine.

Purpose. The purpose of the article is to develop a financial model of the regional division of the insurance company, which would take into account the prospects of the regional insurance market and the amount of investment required to open or expand the unit and allow to forecast cash flows and assess the appropriateness of investments.

Results. According to the results of the analysis of insurance premiums collected by separate structural divisions of insurance companies in 2017-2020, the most promising regional insurance markets were identified. Based on the revealed tendencies the forecast of receipt of insurance payments in regions for 2021-2023 was constructed. The financial model of activity of the newly created division of the insurer in the region was constructed оn the example of Zhytomyr region. The model provided for the definition of: 1) the target market share (depending on the company’s capabilities and the popularity of the insurer’s brand); 2) the structure of the insurance portfolio (based on the characteristic of the market of a particular region of insurance products). In the case of Zhytomyr region, the main types of insurance were defined as compulsory insurance of civil liability of owners of land vehicles under domestic and international agreements, motor insurance and property insurance; 3) the level of insurance payments and commissions (based on actual data for 2020); 4) costs of conducting the case, which included income tax, salaries of full-time employees, payroll, administrative costs, etc.

Conclusions. The financial model of activity of the regional division of the insurance company provides a possibility to predict future cash flow and quantify the investment project for the development of the branch network of insurance companies.

Keywords: regional division; insurance company; insurance, management; financial model.

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