Financial risks of the stock market: opportunities and specifics of their insurance
The Ukrainian stock market is rated as an emerging market, which is characterized by high profitability and higher risk level as compared to developed economies. Securities transactions on the Ukrainian stock market are accompanied by stable uncertainties. Moreover, insurance is the most effective w...
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doaj-2012006918bd42fcbba442d03836db8a2020-11-25T01:48:01ZengLLC "CPC "Business Perspectives"Insurance Markets and Companies 2616-35512522-95912019-11-01101263510.21511/ins.10(1).2019.0312633Financial risks of the stock market: opportunities and specifics of their insuranceInna Shkolnyk0Eugenia Bondarenko1Ievgen Balatskyi2Doctor of Economics, Professor, Head of the Department of Finance, Banking and Insurance, Sumy State University Assistant, Department of Finance, Banking and Insurance, Sumy State UniversityDoctor of Economics, Head of the Department of Management and Financial and Economic Security, Education and Research Institute for Business Technologies «UAB» Sumy State University The Ukrainian stock market is rated as an emerging market, which is characterized by high profitability and higher risk level as compared to developed economies. Securities transactions on the Ukrainian stock market are accompanied by stable uncertainties. Moreover, insurance is the most effective way to reduce financial risks and their negative effects. Given the current economic and political instability, financial risk insurance can ensure the economic performance of business entities and stimulate their further economic development. Financial risk insurance is the liability insurance in its nature, but its terms are often included in property insurance. This insurance sector has considerable facilities, which require activation of new insurance products that will be able to protect individual and institutional investors. Insurance and stock markets are direct competitors for limited investor resources, including strategic sources such as temporarily free institutional investor funds and household savings. In general, although there is a significant interaction between the insurance and other financial markets in Ukraine, it is hardly realized at all, unlike foreign economies, where it is used to its maximum. With the development of the insurance culture of the population and insurance in general, the relevance of insurance services in a high-risk segment like the stock market increases. The article harmonizes types of financial risks arising on the stock market with the methods of their leveling (insurance, hedging, diversification, etc.), determines the risk factors of the investor in the stock market, and specifies the professional risks of financial institutions. For the Ukrainian stock market participants, the use of two types of insurance coverage, namely, Bankers Blanket Bond and Financial Institution Professional Indemnity, is proposed.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12633/IMC_2019_01_Shkolnyk.pdfconvergencecredit riskfraud riskinsurance companyinvestment riskliquidity risk |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Inna Shkolnyk Eugenia Bondarenko Ievgen Balatskyi |
spellingShingle |
Inna Shkolnyk Eugenia Bondarenko Ievgen Balatskyi Financial risks of the stock market: opportunities and specifics of their insurance Insurance Markets and Companies convergence credit risk fraud risk insurance company investment risk liquidity risk |
author_facet |
Inna Shkolnyk Eugenia Bondarenko Ievgen Balatskyi |
author_sort |
Inna Shkolnyk |
title |
Financial risks of the stock market: opportunities and specifics of their insurance |
title_short |
Financial risks of the stock market: opportunities and specifics of their insurance |
title_full |
Financial risks of the stock market: opportunities and specifics of their insurance |
title_fullStr |
Financial risks of the stock market: opportunities and specifics of their insurance |
title_full_unstemmed |
Financial risks of the stock market: opportunities and specifics of their insurance |
title_sort |
financial risks of the stock market: opportunities and specifics of their insurance |
publisher |
LLC "CPC "Business Perspectives" |
series |
Insurance Markets and Companies |
issn |
2616-3551 2522-9591 |
publishDate |
2019-11-01 |
description |
The Ukrainian stock market is rated as an emerging market, which is characterized by high profitability and higher risk level as compared to developed economies. Securities transactions on the Ukrainian stock market are accompanied by stable uncertainties. Moreover, insurance is the most effective way to reduce financial risks and their negative effects. Given the current economic and political instability, financial risk insurance can ensure the economic performance of business entities and stimulate their further economic development. Financial risk insurance is the liability insurance in its nature, but its terms are often included in property insurance. This insurance sector has considerable facilities, which require activation of new insurance products that will be able to protect individual and institutional investors. Insurance and stock markets are direct competitors for limited investor resources, including strategic sources such as temporarily free institutional investor funds and household savings. In general, although there is a significant interaction between the insurance and other financial markets in Ukraine, it is hardly realized at all, unlike foreign economies, where it is used to its maximum. With the development of the insurance culture of the population and insurance in general, the relevance of insurance services in a high-risk segment like the stock market increases. The article harmonizes types of financial risks arising on the stock market with the methods of their leveling (insurance, hedging, diversification, etc.), determines the risk factors of the investor in the stock market, and specifies the professional risks of financial institutions. For the Ukrainian stock market participants, the use of two types of insurance coverage, namely, Bankers Blanket Bond and Financial Institution Professional Indemnity, is proposed. |
topic |
convergence credit risk fraud risk insurance company investment risk liquidity risk |
url |
https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12633/IMC_2019_01_Shkolnyk.pdf |
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