INSURANCE COMPANY RISK MANAGEMENT SYSTEM IMPROVEMENT

In modern business environment, insurance companies are an important factor of financial market development of overall economic and industrial progress of the country. If we assume that the key determination of every insurance company is to increase the competitiveness of its insurance services, increase its market share and profit realization, the question is how to most efficiently achieve these, often conflicting, objectives.
In addition to the traditional approach to increasing insurance portfolio and, consequently, the total insurance assets, a basic requirement of better positioning of insurance companies in the market is proper management of all risks which the Insurer is facing in his business, not only those assumed from the Insured. That is why the subject of this paper is a set of risks that affect the activities of Insurers. These are primarily insurance risks, liquidity risks, counterparty default risks, market, operational, legal and other significant risks. Application of the VaR model for measuring market risk is the most common and is yet to demonstrate its effectiveness with other risks in future.

Key words: risk, risk types, risk management, VaR model, Solvency II, insurance premium