Openness of the insurance market for foreign entities: methodology and experience of Ukraine
Tatyana Vieriezubova, Valentina Levchenko
Financial Markets Institutions and Risks
The article is devoted to the development of methodical tools for determining the level of openness of the insurance market in Ukraine. The proposed level of openness of the insurance market of Ukraine should be considered as an opportunity (potential) for domestic insurers to interact effectively with foreign investors and financial intermediaries. It has been established that the mathematical tool for realizing the task should be a gravity modeling, which, taking into account the inflow and
... tflow of the characteristics of the openness of the insurance market of Ukraine, allows us to determine the degree of its remoteness from the insurance markets of Europe and the World. It is proved that the openness of the insurance market of Ukraine serves not only as an indicator of the level of readiness of the interaction of domestic financial intermediaries with foreign entities, but also fully characterizes the infrastructural level of the Ukrainian insurance market. Inroduction Liberalization of financial relations has different aspects of influence, it can lead to intensification of domestic financial intermediaries, increase their capitalization and activate infrastructure transformations, or, conversely, cause loss of national companies, create a monopoly in the market and minimize the possibilities of state regulatory bodies. Certainly, each of these scenarios of development depends on the characteristics of the national insurance market and the stage of its development. In the realities of the functioning of the Ukrainian insurance market, globalization processes serve as a catalyst for the development of financial intermediaries. However, on the example of the Ukrainian banking financial services market we can state that foreign capital and foreign technologies are actively entering the market only during its period of higher-than-market-growth and favorable economic as well as political situation in the country. Subsequently, if the market does not grow and does not develop, foreign capital withdraws from the market, that was observed in 2014-2015 in the banking sector, after its active expansion by foreign banks in 2005-2007.