INSURANCE MECHANISMS OF RISK MINIMIZATION IN THE RISK MANAGEMENT SYSTEM OF BANKING AND INSURANCE INSTITUTIONS

Анотація

The article examines the theoretical and methodological principles and applied aspects of insurance mechanisms use of risk minimization in the banking and insurance risk management system. It is substantiated that under conditions of martial law, digitalization of financial services, increased regulatory requirements and growth of cyber threats, insurance mechanisms are transformed from a tool for compensation of losses into a component of integrated risk management. The features of the risk profile of banking and insurance institutions are determined and it is proven that the effective use of insurance, reinsurance, reserving, coinsurance, liability limitation, stress testing and cyber insurance contributes to reducing the variability of financial results, protecting capital, maintaining liquidity and solvency. The main stages of the application of insurance mechanisms are systematized: risk identification, their assessment, selection of risk transfer forms or retention, integration of insurance protection into the internal control system and monitoring of efficiency. It is proven that for banks, insurance mechanisms are important in protecting credit, operational, cyber and reputational risks, and for insurers - in stabilizing the underwriting result, forming technical reserves and ensuring proper reinsurance coverage. It is substantiated that the integration of insurance mechanisms into corporate governance increases the adaptability of financial institutions to systemic shocks and crisis phenomena. It is emphasized that the intersectoral nature of insurance mechanisms makes it possible to combine the interests of banks, insurers, the regulator and clients, ensuring the transfer of the risk part, compensation for financial losses, reducing unprofitability and increasing the predictability of cash flows. It is established that under Ukrainian conditions, the development of cyber insurance, improving financial risk insurance in the banking sector, strengthening reinsurance protection and expanding digital monitoring tools are of particular importance. The practical significance of the results lies in the possibility of using the proposed approaches to strengthen the financial stability of banks and insurance companies in an unstable external environment.

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