Bankinsurance: new challenges and development prospects in Ukraine

Abstract

The article reveals the essence of modern bank insurance and new challenges and prospects for development in Ukraine. The definition of "bank insurance" is theoretically substantiated and the general financial and economic characteristics of Ukrainian banks are realized. The normative indicators of commercial institutions are analyzed and the main risks affecting banking and insurance activities, the possibility of their leveling are determined. Theoretical and practical information on the process of merging the capital of banks and insurance companies, financial and economic analysis of one of the largest banks in modern Ukraine - JSC "PrivatBank", and assessed the financial stability of its insurance partners. A study of the insurance market of Ukraine with the definition of possible prospects for cooperation with the studied bank. From the calculations it was found that PrivatBank can be recommended to find new partners for cooperation between leading companies, such as: AXA Insurance and Providna. It is established that banking insurance technologies have a significant place at the present stage of development of the domestic financial segment. Using a large customer base and a wide network of branches and outlets, banking experts expect that revenues from the sale of insurance products in 2021 may amount to 15% of total bank revenues, as the volume of bank insurance in JSC CB "PrivatBank" is growing quite rapidly. . The activity of banks in market conditions is subject to its general laws, and therefore requires the development of a viable mechanism for managing financial activities, aimed at increasing the competitiveness of banks. Thus, the ability of bank managers to determine the degree of financial stability of their own bank, competing banks and counterparties plays an important role. Therefore, one of the principles of further rapid development of the banking system of Ukraine is the search for ways to optimize the financial condition of the bank.

Today, given the functioning of a market economy, all parts of the financial services market should improve their activities and find new ways to innovate in their activities to strengthen their position in the market niche, improve competitiveness and expand sales channels for their products and services. The process of globalization of financial markets in the world economy has transformed the relationship between banks and insurance companies. Banking and insurance are among the most risky, so in the 70s of last century began the process of integrating banking and insurance capital. Mutual penetration of banking and insurance business over the past ten years has been the dominant trend in the financial market, which created the preconditions for consideration and analysis of such a phenomenon as banking insurance. Integration in the form of bank insurance has been put into practice in the domestic market and has its own dynamics of development. The integration of banks and insurance companies is currently a new stage in the development of banking and insurance systems. It is due to the expansion of activities and spheres of influence of banks, and the desire to increase the number of customers, and hence the size of profits, insurance companies. In the current period of economic development of Ukraine, there is a need for research on the best option for unification and its possible forms to achieve the above goals.

The banking system is a set of financial institutions, the purpose of which is to comprehensively carry out operations to attract temporarily available financial resources, preserve individuals and legal entities and place accumulated resources on their behalf in accordance with their maturity and payment in accordance with agreements [27]. The banking system organizes and serves to move the main attribute of the market - capital, ensures its attractiveness, accumulation and distribution in those areas of social production where there is a deficit.

Insurance is a system of economic relations between policyholders and insurers, which includes a set of forms and methods of creating trust funds (insurance funds) and their use to compensate for losses caused by various adverse events (insurance events) [24]. Also, insurance is a system of economic relations arising from the purchase and sale of insurance coverage in the process of meeting public needs for insurance protection [16, Art. 662]. For most domestic banks, credit risk is the main importance that needs to be controlled and minimized. Credit risk is the risk that a borrower will be unable to meet its obligations to a bank. In terms of economic transformation, bank insurance can be an effective method of minimizing the bank's credit risk [11, Art. 55].

The interaction of banking and insurance business is due to the common interest in banking insurance. Banks benefit from the maximum load of the network of their branches, diversification of their traditional business areas by providing customers with a wide range of financial and insurance services, as well as receiving additional commissions for their implementation. Cooperation with banks allows an insurance company to take advantage of synergistic opportunities to use a common customer base, use of the brand or the bank's reputation in banking insurance.

Thus, on the example of JSC CB "PrivatBank" we can conclude that banking insurance technologies have a significant place at the present stage of development of the domestic financial segment. Using a large customer base and a wide network of branches and outlets, banking experts expect that revenues from the sale of insurance products in 2021 may amount to 15% of total bank revenues, as the volume of bank insurance in JSC CB "PrivatBank" is growing quite rapidly. . The activity of banks in market conditions is subject to its general laws, and therefore requires the development of a viable mechanism for managing financial activities, aimed at increasing the competitiveness of banks. An important role is played by the ability of bank managers to determine the degree of financial stability of their own bank, competing banks and counterparties. Therefore, one of the principles of further rapid development of the banking system of Ukraine is the search for ways to optimize the financial condition of banks.