FINANCIAL STABILITY OF INSURANCE COMPANIES IN UKRAINE: CURRENT CHALLENGES AND PROSPECTS FOR SUSTAINABLE DEVELOPMENT

Abstract

The insurance sector is one of the key components of the financial system, ensuring the protection of individuals and businesses against financial risks while promoting macroeconomic stability and sustainable economic development. Under current conditions, Ukrainian insurance companies operate in an environment characterized by heightened uncertainty resulting from military aggression, macroeconomic instability, inflationary processes, structural transformation of the financial services market, and the implementation of new regulatory requirements. These factors significantly affect insurers' financial resilience, making the assessment of their financial stability particularly relevant.

The study demonstrates that the financial stability of insurance companies is determined by a combination of internal and external factors. Internal determinants include the effectiveness of financial management, the adequacy of insurance reserves, underwriting quality, investment and reinsurance policies, portfolio diversification, and corporate governance. External influences are associated with military risks, macroeconomic instability, inflation, regulatory changes, fluctuations in financial markets, and declining consumer purchasing power. Particular attention is devoted to analyzing the impact of wartime conditions on the functioning of insurance companies, including changes in regulatory requirements, the emergence of insurance products covering war-related risks, and the adaptation of insurers to new operational conditions.

The results indicate that, despite a substantial reduction in the number of insurance companies operating in Ukraine, the insurance market has become more transparent and financially resilient due to strengthened prudential supervision and the gradual implementation of European regulatory standards. At the same time, insurers continue to face significant challenges related to capitalization, solvency, liquidity, risk management, and maintaining consumer confidence.

The scientific value of the study lies in the comprehensive assessment of contemporary factors influencing the financial stability of Ukrainian insurance companies under wartime and economic transformation. The practical significance of the research consists in the proposed recommendations that may be used by insurance companies, regulatory authorities, and other market participants to strengthen financial resilience, improve the competitiveness of the insurance sector, and support its sustainable long-term development.

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