Business perfomance management of domestic insurance companies in military conflict

Abstract

The article examines the factors contributing to the efficiency of participants in Ukraine's insurance market amidst the backdrop of war. Differences in the functioning of banking and insurance systems during wartime are examined. The paper identifies the key factors that impede the operations of Ukrainian insurers and directly impact their effectiveness. It is noted that issues stemming from the war have led to a reduction in the number of market participants, and this trend continues. The analysis showed that the majority of leading insurance companies in the Ukrainian insurance market managed to overcome the initial adverse effects of the war and reestablish profitable operations by the end of 2022. The experience gained during the COVID-19 pandemic aided insurers in maintaining control and preserving their client base in unoccupied territories. Calculations based on reported data from well-known insurance companies indicate that acceptable return on equity indicators were achieved by the end of 2022, primarily due to the use of financial leverage (considering the specific nature of insurance). However, the high level of inflation in the country during 2022 hindered insurers from attaining a satisfactory rate of return on their assets, thus constraining their overall effectiveness. Stabilization and gradual market growth in 2023, coupled with official forecasts of reduced inflation in 2024-2025, provide grounds for optimism regarding the attainment of the necessary operational and financial efficiency in the upcoming years. The research demonstrates the efficacy of anti-crisis measures while also shedding light on their limitations in terms of future success. To achieve strategic transformations and ensure effective long-term operation, enterprises must increase capitalization through external investments, develop and implement new insurance services aligned with contemporary needs, design, deepen, and execute digital transformation programs for the insurance sector, refine investment policies, and collaborate with industry associations to work towards the elimination of discriminatory tax legislation.