Analysis of integration processes of banking institutiona and insurance companies in Ukraine

Abstract

The processes of globalization, technology improvement and increasing competition put banks and insurance companies in need of increasing and changing the range of their services. The requirement to increase the level of profitability of their own activities stimulates the integration processes of banks and insurance companies and is one of the options to increase the supply of financial assets and increase demand for them.

It is proved that the volume of assets allowed for presentation by bank deposits increased in 2019. This trend can be trace over the five analyzed years, which confirms the existence of gradual integration of banks and insurance companies in Ukraine. In addition, bank deposits account for the largest share of all other financial instruments and, as a result, provide insurers with the largest share of financial income, and investing in the capital of insurance companies remains a priority source of credit and investment resources for banks.

It is determined that the prospect for the functioning of banks and insurance companies in Ukraine is bancassurance, as the population has a greater demand for banking products and trusts banks more than insurance companies. This concept of cooperation will lead to a synergistic effect, when the demand for the purchase of one product (banking) will facilitate the purchase of another (insurance), which is the main purpose of bancassurance. The bank, in turn, as the «leader» of the project, ensures the maximum load of the branch network, expands the range of financial services at the expense of insurance and at the expense of the latter receives additional commission benefits.

International experience leaves its mark on the activities of financial and credit institutions, which leads to its transparency and civility and the need for continuous improvement of reliability. At the same time, insurance, as part of the overall risk management system, is the most important element of business sustainability. The study identified the main benefits of cooperation between banks and insurance companies, including increased service because of a combination of banking and insurance products, providing non-traditional banking services, creating sources of additional income, reducing the cost of certain insurance services.