Essence and functions of the insurance market. Theoretical foundations of the functioning of the insurance market, the economic essence of the insurance market Functions of the insurance market

07.12.2020

The place of the insurance market is due to two circumstances. On the one hand, there is an objective need for insurance protection, which leads to the formation of an insurance market in the socio-economic system of society. On the other hand, the monetary form of organizing an insurance fund for providing insurance protection connects this market with the general financial market.

The place of the insurance market in the financial system is determined both by the role of various financial institutions in the financing of insurance coverage, and their importance as objects of placement of investment resources of insurance companies and servicing insurance, investment and other activities.

In such relations, the relevant financial institutions act as insurers and consumers of insurance products. Specific relations are formed between the insurance market and the state budget and state off-budget funds, which is associated with the organization of compulsory insurance.

The insurance market has stable financial relations with the securities market, the banking system, the foreign exchange market, state and regional finance, where insurance organizations place insurance reserves and other investment resources.

The functioning of the insurance market takes place within the framework of the financial system, both on a partnership basis and in a competitive environment. This concerns the competition between various financial institutions for free funds of the population and business entities. If the insurance market, for example, offers life insurance products, then banks offer deposits, stock market– securities, etc.

The insurance market performs a number of interrelated functions: compensatory (return), accumulation, distribution, preventive and investment:

1) The main function of the insurance market is a compensatory function, thanks to which the institution of insurance exists. The content of the function is expressed in providing insurance protection to legal and natural people in the form of compensation for damage in the event of adverse events, which was the object of insurance.

2) The accumulative or savings function is provided by life insurance and allows accumulating a predetermined sum insured against the concluded insurance contract.

3) The distributive function of the insurance market implements the mechanism of insurance protection. The essence of the function is expressed in the formation and targeted use of the insurance fund. The formation of the insurance fund is implemented in the system of insurance reserves, which provide a guarantee of insurance payments and the stability of insurance.

4) The preventive function of the insurance market is not directly related to the implementation of insurance activities. This function works to prevent an insured event and reduce damage. The implementation of the preventive function is ensured by financing measures to prevent or reduce the negative consequences of accidents and natural disasters. Appropriate funding comes from the Prevention Fund. The implementation of preventive functions helps to increase the financial stability of insurers and acts an important factor ensuring the continuity of the process of social reproduction.

5) The investment function of the insurance market is implemented through the placement of temporarily free funds in securities, bank deposits, real estate, etc. With the development of the insurance market, the role of the investment function increases. Attention is drawn to a number of foreign economists who define insurance companies as institutional investors whose main function in social production is to mobilize capital through insurance. II. Ukrainian insurance market

Place of the insurance market in the financial system

The insurance market has historically emerged in the process of formation of a commodity economy and has become an integral part of its functioning. The condition for the existence of both is the social division of labor and the corresponding existence of various owners - separate commodity producers. The independence of the subjects of market relations led to the emergence of the insurance market and the equal partnership of its participants in the purchase and sale of insurance services. The insurance market assumes a developed system of horizontal and vertical links, competition, improvement of insurance products and growth in the efficiency of insurance operations.

The insurance market is a part of the financial market, a place where insurance products are sold and bought.

The public need to compensate for material losses determines the need to establish economic relations between people in connection with the prevention, limitation and overcoming of risks.

The place of the insurance market in the financial system in general and in the financial market in particular is determined by two circumstances. On the one hand, there is an objective need for insurance protection, which leads to the emergence of an economic phenomenon - the insurance market. With another? the monetary form of organizing an insurance fund for ensuring insurance protection connects this market with the general financial market (Fig. 1).

insurance market service Russian

Rice. 1 Place of the insurance market in the financial system

Insurance is a prerequisite for social reproduction. Therefore, the costs of providing insurance protection should be included in the production costs, which corresponds to the depreciation theory of insurance. The insurance market not only actively influences the process of expanded reproduction, but also actively influences financial flows in the economy through the insurance fund. The monetary form of organization of insurance relations includes insurance in the general sphere of the financial market.

The functioning of the insurance market takes place within the framework of the financial system, both on partnership terms and in a competitive environment. This concerns the competitive struggle between various financial institutions for free funds of the population and business entities. If the insurance market offers insurance products, then banks - deposits, the stock market - securities, etc.

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The place of the insurance market in the financial system is shown in fig. 8.1. His position is due to two factors. On the one hand, there is an objective need for insurance protection, which leads to the formation of an insurance market in the socio-economic system of society. On the other hand, the monetary form of providing insurance protection connects this market with the general financial market.

The objective need for insurance predetermines the direct connection of the insurance market with the finances of enterprises, the population, the banking system, the state budget and other financial institutions within which insurance relations are implemented. In such relations, the relevant financial institutions act as insurers and consumers of insurance products. Specific relations are formed between the insurance market and the state budget and state off-budget funds, which is associated with the organization of compulsory insurance.

The functioning of the insurance market takes place within the framework of the financial system both on a partnership basis and in a competitive environment. This concerns the competition between various financial institutions for free funds of the population and business entities.

If the insurance market, for example, offers life insurance products, then banks - deposits, the stock market - securities, etc.

In a narrow sense, the insurance market can be represented as economic space, or a system controlled by the ratio of buyers' demand for insurance services and the supply of insurance protection sellers. In a broad sense the insurance market is the sphere of monetary relations, where the object of purchase and sale is insurance protection, demand and supply for it are formed.

The insurance market is a complex developing inter-system, the links of which include insurance organizations, policyholders, insurance products, insurance intermediaries, professional assessors of insurance risks and losses, associations of insurers, associations of insurers and the system of its state regulation.

Insurance organizations are the institutional basis of the insurance market, an economically isolated link in the insurance market, which is expressed in the complete isolation of its resources and independence in the implementation of insurance and other activities. Insurance organizations are structured according to their affiliation, the nature of the insurance operations performed, and the service area.

By affiliation insurance organizations are divided into joint-stock, private, mutual insurance companies. A joint-stock insurance organization is a non-state organizational form in which private capital acts as an insurer in the form of a joint-stock company. The authorized capital of a joint-stock insurer is formed from shares and other securities, which allows, with limited funds, to significantly increase the financial potential of the insurance company. The joint-stock form of insurers dominates the insurance markets of developed countries. Private insurance organizations belong to one owner or his family. The English corporation Lloyd, which is not a legal entity, but an association of individuals, can be attributed to a unique form of private insurers. In state insurance, the state acts as the insurer. The circle of interests of the state includes its monopoly on carrying out any or certain types of insurance, which is determined by the relevant law on the status of an insurance organization. Implementation of state insurance is a form of state regulation of the national insurance market. A mutual insurance society is a special non-state organizational form that expresses an agreement between a group of individuals or legal entities to compensate each other for future possible losses in certain shares in accordance with established insurance rules. Mutual insurance in essence is a non-commercial form of organizing an insurance fund that provides insurance protection for the property interests of members of its society. From a legal standpoint, each member of a mutual insurance society is both an insurer and an insured. An insurance policy serves as a document certifying the right to own the capital of a mutual insurance company, its income and insurance protection.

By the nature of the insurance operations performed distinguish between specialized and universal insurance organizations. Specialized insurance organizations carry out certain types of insurance (life, fire, nuclear insurance, etc.). Specialized insurers also include reinsurance organizations that accept part of the insured risk from insurers for a fee. The purpose of reinsurance is to create a balanced portfolio of insurance contracts, ensure financial stability and profitability of insurance operations. Universal insurance organizations offer a wide range of insurance services.

By service area distinguish between local, regional, national and international (transnational) insurance organizations.

Demand for insurance products is presented by the insured, a legal entity or a capable natural person who insures property or concludes a personal or liability insurance contract with the insurer. The policyholder pays insurance premiums and has the right to receive insurance in the event of an insured event.

The product of the insurance market is an insurance product. The use value of an insurance product consists in providing insurance protection. The price of an insurance product is determined by the cost of insurance compensation or insurance coverage, as well as the costs of doing business and the amount of profit of the insurer. Like any price, it depends on supply and demand.

The promotion of insurance products and their sale are mainly carried out by intermediaries: insurance agents and insurance brokers. Insurance agents - individuals or legal entities acting on behalf of the insurer and on his behalf in accordance with the powers granted. Insurance brokers may be independent legal entities or individuals licensed to carry out intermediary insurance operations on their own behalf on the basis of instructions from the insured or insurer. The insurance broker is not involved in the insurance contract. His duty is to provide mediation services and assist in the execution of the insurance contract.

The functioning of the insurance market implies the presence of professional risk and loss assessors, which are surveyors and adjusters. Surveyors - inspectors or agents of an insurance company who inspect property accepted for insurance. Surveyors are also specialized firms in fire safety, labor protection, etc., interacting with the insurer on a contractual basis. Based on the conclusion of the surveyor, the insurance organization makes a decision to conclude an insurance contract. Adjusters- these are authorized individuals or legal entities of the insurer involved in establishing the causes, nature and amount of losses. According to the results of the work performed, the adjuster draws up an insurance act (accident certificate).

In order to protect their interests, develop legislative acts, prepare standard insurance rules, collect and publish insurance statistics and other joint goals, insurance organizations create unions (associations) of insurers at the regional and national levels. In addition, specialized insurance companies are merging. Such associations of insurers may not engage in insurance activities.

Insurers also protect their interests by creating associations of insurers. They represent the interests of injured insurers from unscrupulous insurance organizations, provide legal assistance to victims, participate in the improvement and development of insurance legislation, etc.

An important link in the insurance market is the system of state regulation, the need for which is associated primarily with the protection of the rights and interests of policyholders, preventing their financial losses due to the insolvency of the insurance company.

Thus, the structure of the insurance market can be characterized in institutional, territorial and sectoral aspects.

In the institutional aspect, the structure of the insurance market is determined by the system of law in relation to the organizational and legal forms of insurers and the regulation of their activities.

According to the scale and coverage of territories (zones of activity), the world, international, national, regional and local insurance markets are distinguished.

In the sectoral aspect, the insurance market is divided into industries and individual types of insurance (for example, the market for personal, property and liability insurance), each of which, in turn, can be divided into separate segments (life insurance market, property insurance market individuals etc.).

Comparing the current state of the insurance markets in Russia and developed countries, it should be noted that, despite the ongoing last years efforts, the domestic far behind the insurance markets of economically developed countries.

The Russian product line in insurance is significantly shorter than its foreign counterparts. At the end of the last century, there were about 60 types of insurance in Russia, while in Europe - about 500, and in the USA - up to 3,000 types. For comparison, it can be noted that Russian insurers in 2002 offered organizations and individuals over 200 various kinds insurance services.

A special place in the regulation of the insurance market is given to marketing. Marketing as a method of managing the commercial activities of insurance organizations and a method of researching the insurance services market has appeared relatively recently. Western insurance organizations began to use it in the early 1960s, but there are still no clear boundaries for its definition.

Marketing is an integrated approach to the organization and management of all activities of an insurance organization aimed at providing insurance services that correspond in quantity and quality to potential demand.

The experience of using marketing in the market activities of insurance organizations allows us to distinguish two of its main functions:

■ formation of demand for insurance services;

■ satisfaction of insurance interests.

Insurer marketing principles:

■ studying the situation in the insurance market;

■ segmentation of the insurance market;

■ innovation (continuous improvement of the modification of insurance products, taking into account market requirements).

The most important areas of marketing:

1) definition of the market of insurance services;

2) analysis and forecasting of the conjuncture of the insurance market;

3) promotion of the insurance product on the market (advertising, personal contact, propaganda, stimulation);

4) study of the potential opportunities of competing organizations.

Analysis of information on the state of demand for insurance services, taking into account their own financial capabilities allow the organization to develop a business strategy plan for the development of the insurance market:

1) defining a strategy for a given product;

2) selection of promising types of insurance;

3) selection of optimal channels for the provision of insurance services;

4) determination of a system for stimulating demand for services (tariff reduction, benefits);

6) calculation of profitability;

7) feasibility study of marketing expenses;

8) control.

Segmentation of the insurance market. The segment is the consumers of insurance services, equally reacting to certain offers of insurance organizations.

Market segmentation is the process of dividing consumers into groups according to some characteristic that is relevant for the implementation of insurance services (age, gender, material wealth, profession).

There are geographic (on a regional basis) and demographic segmentation (gender, age, income level) of the market.

Thus, with the help of the marketing service, coordination of the activities of all existing divisions of the insurance organization is ensured, turning them into a single system, which will allow the management of the insurance organization to purposefully influence the insurance market.

Management in insurance includes the management of intellectual, financial, raw materials in order to ensure the most efficient operation of the insurer.

A characteristic feature of the insurance market is the unpredictability of the possible outcome, i. its risky nature. Thus, the main feature of insurance management is risk management.

The main duty of the manager in these conditions is not to avoid risk, but to anticipate it, to reduce possible negative consequences to a minimum, if it is impossible to avoid them. Purposeful actions to limit risk in the system of insurance relations are called "risk management" or "risk management".

Risk management makes it possible to assess the value of insurance risk close to the actual one, to develop measures by which negative results of actions can be neutralized.

Risk management methods:

■ elimination - an attempt to avoid risk;

■ loss prevention and control;

■ insurance in terms of risk management (creation by participants of insurance funds and compensations in the form of insurance payments);

■ Absorption - recognition of damage without compensating it through insurance.

Risk management process consists of the following steps:

1) goal definition;

2) risk identification (statistical data);

3) risk assessment (determining the probability of an insured event and the amount of insured damage);

4) choice of risk management method.

To carry out the functions of an insurance organization, its organizational structure management. The management structure is created taking into account the external environment, takes into account its size, specialization.

The universality of insurance determines the direct connection of the insurance market with the finances of enterprises, the finances of the population, the banking system, the state budget and other financial institutions within which insurance relations are implemented. In such relations, the relevant financial institutions act as insurers and consumers of insurance products. Specific relations are formed between the insurance market and the state budget, state off-budget funds, which is associated with the organization of compulsory insurance.

The functioning of the insurance market takes place within the framework of the financial system, both on a partnership basis and in a competitive environment. This concerns the competition between various financial institutions for free funds of the population and business entities. For example, if the insurance market offers life insurance products, then banks - deposits, the stock market - securities, etc.

The insurance market performs a number of interrelated functions: compensation, accumulation, distribution, preventive and investment. The main function of the insurance market is compensatory, thanks to which the institution of insurance exists. The content of the function is expressed in providing insurance protection to legal entities and individuals in the form of compensation for damage in the event of adverse conditions. Cumulative or the savings function is provided by life insurance and allows accumulating a predetermined sum insured against the concluded insurance contract. The distributive function of the insurance market implements the mechanism of insurance protection. The essence of this function is expressed in the formation and targeted use of the insurance fund. The formation of the insurance fund is implemented in the system of insurance reserves, which provide a guarantee of insurance payments and the stability of insurance.

warning the function of the insurance market is not directly related to the implementation of insurance activities. This function works to prevent an insured event and reduce damage. The implementation of the preventive function is ensured by financing measures to prevent or reduce the negative consequences of accidents and natural disasters. Appropriate funding comes from the Prevention Fund. The implementation of preventive functions helps to increase the financial stability of insurers and is an important factor in ensuring the continuity of the process of social reproduction.

Investment The function of the insurance market is realized through the placement of temporarily free funds in securities, bank deposits, real estate, etc. With the development of the insurance market, the role of the investment function increases. Attention is drawn to a number of foreign economists who define insurance companies as institutional investors whose main function in social production is to mobilize capital through insurance.

Insurance arose and developed as a conscious objective need of a person and society for protection against random dangers. The need for insurance protection is universal, it covers all phases of social reproduction, all parts of the socio-economic system of society, all business entities and the entire population. The insurance market not only contributes to the development of social reproduction, but also actively influences financial flows in the national economy through the insurance fund.
The place of the insurance market in the financial system is shown in fig. 8.1. His position is due to two factors. On the one hand, there is an objective need for insurance protection, which leads to the formation of an insurance market in the socio-economic system of society. On the other hand, the monetary form of providing insurance protection connects this market with the general financial market.
The objective need for insurance predetermines the direct connection of the insurance market with the finances of enterprises, the population, the banking system, the state budget and other financial institutions within which insurance relations are implemented. In such relations, the relevant financial institutions act as insurers and consumers of insurance products. Specific relations are formed between the insurance market and the state budget and state off-budget funds, which is associated with the organization of compulsory insurance.
The insurance market has stable financial relations with the securities market, the banking system, the foreign exchange market, state and regional finance, where insurance organizations place insurance reserves and other investment resources.
The functioning of the insurance market takes place within the framework of the financial system both on a partnership basis and in a competitive environment. This refers to the competition between different

financial institutions for free funds of the population and business entities. If the insurance market, for example, offers life insurance products, then banks - deposits, the stock market - securities, etc.
In a narrow sense, the insurance market can be represented as an economic space, or a system governed by the ratio of buyers' demand for insurance services and the supply of insurance protection sellers. In a broad sense, the insurance market is the sphere of monetary relations, where the object of purchase and sale is insurance protection, and demand and supply for it are formed.
The insurance market is a complex developing inter-system, the links of which include insurance organizations, policyholders, insurance products, insurance intermediaries, professional assessors of insurance risks and losses, associations of insurers, associations of insurers and the system of its state regulation.
Insurance organizations are the institutional basis of the insurance market, an economically isolated link in the insurance market, which is expressed in the complete isolation of its resources and independence in the implementation of insurance and other activities. Insurance organizations are structured according to their affiliation, the nature of the insurance operations performed, and the service area.
Insurance organizations are divided into joint-stock, private, mutual insurance companies according to their affiliation. A joint-stock insurance organization is a non-state organizational form in which private capital acts as an insurer in the form of a joint-stock company. The authorized capital of a joint-stock insurer is formed from shares and other securities, which allows, with limited funds, to significantly increase the financial potential of the insurance company. The joint-stock form of insurers dominates the insurance markets of developed countries. Private insurance organizations belong to one owner or his family. The English corporation Lloyd, which is not a legal entity, but an association of individuals, can be attributed to a unique form of private insurers. In state insurance, the state acts as the insurer. The interests of the state include its monopoly on carrying out any or certain types of insurance, which is determined by the relevant law on the status of an insurance organization. Implementation of state insurance is a form of state regulation of the national insurance market. A mutual insurance society is a special non-state organizational form that expresses an agreement between a group of individuals or legal entities to compensate each other for future possible losses in certain shares in accordance with established insurance rules. Mutual insurance in essence is a non-commercial form of organizing an insurance fund that provides insurance protection for the property interests of members of its society. From a legal standpoint, each member of a mutual insurance society is both an insurer and an insured. An insurance policy serves as a document certifying the right to own the capital of a mutual insurance company, its income and insurance protection.
According to the nature of the insurance operations performed, specialized and universal insurance organizations are distinguished. Specialized insurance organizations carry out certain types of insurance (life, fire, nuclear insurance, etc.). Specialized insurers include reinsurance companies,
accepting a part of the insured risk from insurers for a certain fee. The purpose of reinsurance is to create a balanced portfolio of insurance contracts, ensure financial stability and profitability of insurance operations. Universal insurance organizations offer a wide range of insurance services.
According to the service area, local, regional, national and international (transnational) insurance organizations are distinguished.
Demand for insurance products is presented by the insured, a legal entity or a capable natural person who insures property or concludes a personal or liability insurance contract with the insurer. The policyholder pays insurance premiums and has the right to receive insurance in the event of an insured event.
The product of the insurance market is an insurance product. The use value of an insurance product consists in providing insurance protection. The price of an insurance product is determined by the cost of insurance compensation or insurance coverage, as well as the costs of doing business and the size of the insurer's profit. Like any price, it depends on supply and demand.
The promotion of insurance products and their sale are mainly carried out by intermediaries: insurance agents and insurance brokers. Insurance agents - individuals or legal entities acting on behalf of the insurer and on his behalf in accordance with the powers granted. Insurance brokers may be independent legal entities or individuals licensed to conduct intermediary insurance operations on their own behalf on the basis of instructions from the insured or insurer. The insurance broker is not involved in the insurance contract. His duty is to provide mediation services and assist in the execution of the insurance contract.
The functioning of the insurance market requires the presence of professional risk and loss assessors, who are surveyors and adjusters. Surveyors are inspectors or agents of an insurance organization who inspect property accepted for insurance. Surveyors are also specialized firms in fire safety, labor protection, etc., interacting with the insurer on a contractual basis. Based on the conclusion of the surveyor, the insurance organization makes a decision to conclude an insurance contract. Adjusters are authorized individuals or legal entities of the insurer engaged in
by establishing the causes, nature and amount of losses. According to the results of the work performed, the adjuster draws up an insurance act (accident certificate).
In order to protect their interests, develop legislative acts, prepare standard insurance rules, collect and publish insurance statistics and other joint goals, insurance organizations create unions (associations) of insurers at the regional and national levels. In addition, specialized insurance companies are merging. Such associations of insurers may not engage in insurance activities.
Insurers also protect their interests by creating associations of insurers. They represent the interests of injured insurers from unscrupulous insurance organizations, provide legal assistance to victims, participate in the improvement and development of insurance legislation, etc.
An important link in the insurance market is the system of state regulation, the need for which is associated primarily with the protection of the rights and interests of policyholders, preventing their financial losses due to the insolvency of the insurance company.
Thus, the structure of the insurance market can be characterized in institutional, territorial and sectoral aspects.
In the institutional aspect, the structure of the insurance market is determined by the system of law in relation to the organizational and legal forms of insurers and the regulation of their activities.
According to the scale and coverage of territories (zones of activity), the world, international, national, regional and local insurance markets are distinguished.
In the sectoral aspect, the insurance market is divided into sectors and individual types of insurance (for example, the market for personal, property and liability insurance), each of which, in turn, can be divided into separate segments (the life insurance market, the property insurance market for individuals, etc.). ).
Comparing the current state of the insurance markets in Russia and developed countries, it should be noted that, despite the efforts made in recent years, the domestic one lags far behind the insurance markets of economically developed countries.
The Russian product line in insurance is significantly shorter than its foreign counterparts. At the end of the last century, there were about 60 types of insurance in Russia, while in Europe - about 500, and in the USA - up to 3,000 types. For comparison, it can be noted that
Russian insurers in 2002 offered organizations and individuals over 200 different types of insurance services.
A special place in the regulation of the insurance market is given to marketing. Marketing as a method of managing the commercial activities of insurance organizations and a method of researching the insurance services market has appeared relatively recently. Western insurance organizations began to use it in the early 1960s, but there are still no clear boundaries for its definition.
Marketing is an integrated approach to the organization and management of all activities of an insurance organization aimed at providing insurance services that correspond in quantity and quality to potential demand.
The experience of using marketing in the market activities of insurance organizations allows us to distinguish two of its main functions:
formation of demand for insurance services;
satisfaction of insurance interests.
Insurer marketing principles:
study of the conjuncture of the insurance market;
insurance market segmentation;
innovations (continuous improvement of the modification of insurance products, taking into account market requirements).
The most important areas of marketing:
definition of the market of insurance services;
analysis and forecasting of the conjuncture of the insurance market;
promotion of the insurance product on the market (advertising, personal contact, propaganda, stimulation);
study of the potential opportunities of competing organizations.
Analysis of information on the state of demand for insurance services, taking into account their own financial capabilities allow the organization to develop a business strategy plan for the development of the insurance market:
defining a strategy for a given product;
selection of promising types of insurance;
selection of optimal channels for the provision of insurance services;
determination of a system to stimulate demand for services (reduction of tariffs, benefits);
choice of competition instruments (advertising, commissions);
calculation of profitability;
feasibility study of marketing expenses;
the control.