The Essence and Determinants of the Formation of the Value of Insurance Company

Abstract

The article is aimed at further study of the theory of value in terms of determining the essence of the value of an insurance company and allocating the determinants of its formation. Analyzing, systematizing and summarizing the works of many scholars, approaches to the interpretation of the value of the company, in particular the insurer, were considered and the author’s definition was proposed. The value of an insurance company is the monetary equivalent of the utility that the company creates for all stakeholders in the process of carrying out its operational, investment and financial activities, and also the value of tangible and intangible assets that it owns. As a result of the study, it was revealed that the dominant factor in the formation of the value of an insurance company is that in the process of functioning of the company conditions are created for increasing its value. Satisfying the economic needs of policyholders, the insurer receives cash receipts, forms insurance and investment portfolios and increases its own capitalization. The necessity to consider the value of an insurance company simultaneously from the standpoint of two forms of its manifestation: the value of the integral property complex and the value of the insurance business is substantiated. The proposed approach will provide an opportunity to see a holistic picture of economic relations that develop in the process of formation, evaluation and value management of the insurer. The features of the insurance company as a commodity in the market of purchase and sale are determined. Prospects for further research in this direction are the development of practical recommendations for the development and implementation of a value-oriented management system in the near future for the recovery of the insurance business, rethinking the philosophy of its functioning and providing insurance protection to the population and economic entities.

Keywords

• value of insurance company
• stakeholders
• utility
• business processes
• price
• assets
• value-oriented approach.