Strategic modelling of financial results of the National Joint Stock Insurance Company “Oranta”
Students Name: Stets Nataliia Stepanivna
Qualification Level: master (ESP)
Speciality: Finance, Banking and Insurance
Institute: Institute of Economics and Management
Mode of Study: full
Academic Year: 2022-2023 н.р.
Language of Defence: англійська
Abstract: The effective functioning of the insurance market is an important component of the overall development of the country. The current state of the domestic insurance services market requires managers and executives of insurance companies to make managerial decisions in conditions of uncertainty, when the activities of organizations are influenced by various threats, the result of which can be insolvency or bankruptcy [4]. At the current stage of the activity of insurance companies in Ukraine, one of the most decisive factors for successful functioning is the correct selection of a financial strategy in the long-term perspective. To create this strategy, it is necessary, first of all, to design a financial model, taking into account the internal and external factors that affect the activity of National Joint-Stock Insurance Company "Oranta". Financial modeling has gained high popularity since the mid-20th century and has since become an essential component of the decision-making process in the financial sector. In Ukraine, the first publications on financial modeling appeared in the 1990s, shortly after which students of educational institutions began to study financial modeling and build models using special programs. Currently, most Ukrainian insurance companies use financial models for planning and management. The use of financial modeling helps to manage risks and make effective decisions based on data analysis and forecasting of future results [1]. The purpose of the master’s thesis is to investigate the financial modeling of insurance companies using the example of National Joint-Stock Insurance Company "Oranta" and analyze the impact of implemented decisions on the financial performance of the insurer. The object of the study in this work is PJSC "Oranta," as well as insurance services provided by this insurance company. The results of this study will primarily be the construction of a financial model under certain conditions, taking into account external and internal factors of the present. In addition, the results of implemented project decisions will serve as an optimizer of the financial situation of the object and will also neutralize negative external factors that cannot be avoided. The first chapter will focus more on the main approaches to strategic planning of financial indicators of an insurance company and methods of their application. A preliminary analysis of the financial performance of the research object over the past years will also be conducted to identify the strengths and weaknesses of PJSC "Oranta" with an in-depth analysis of individual types of activities for more accurate modeling in the following chapters. A more general analysis of the insurance company in terms of individual types of insurance and the relationship of performance indicators with the macroeconomic environment will be conducted. The second chapter will be devoted to analyzing the activities of PJSC “Oranta” with regard to financial indicators. The financial results of the company for the last three years will be studied, and a comparative analysis with the results of competitors in the insurance market of Ukraine will be conducted using SWOT analysis. A model for optimizing the structure of the insurance portfolio by type of insurance will also be proposed. Additionally, a scientific study of the insurance market in 2022 will be presented. In the third chapter, strategic financial modeling will be conducted for three reports to create a model that is as close to real values as possible for PJSC "Oranta" to forecast performance for the next 3-5 years based on influencing factors and performance indicators from past periods under certain assumptions. Based on this model, a series of project decisions will be made, and changes in the main sections of the reports will be analyzed, and forecast financial performance will be calculated. The use of financial modeling is an important component of the successful operation of the Ukrainian insurance company PJSC "NASK "Oranta", as it helps to make informed and effective decisions based on data analysis. The study will also provide recommendations on strategic planning and risk management, as well as propose specific measures to improve the financial stability of the company. Therefore, the application of financial modeling allows insurance companies to avoid the need for expensive experiments and testing of new strategies that may be risky and unproductive. With the help of financial models, companies can evaluate different scenarios and choose the most effective ways of development and risk management [3]. Key words: insurance company, financial modeling, risk, financial stability, planning, scenarios. References: 1. Egorova, H. V. (Ed.) (2019). Financial market of Ukraine: state and development prospects. Kyiv: KNEU. 2. Tjia, J. S. (2017). Financial modeling: a practical guide for managers. Cambridge, Massachusetts: The MIT Press. 3. Pignataro, P. (2013). Financial Modeling and Valuation: A Practical Guide to Investment Banking and Private Equity. Hoboken, New Jersey: John Wiley & Sons. 4. Khoma, I. B., & Gorislavets, P. A. (2020). Threats to financial security of the insurance market of Ukraine. Problems and prospects of development of the financial system in modern conditions: Proceedings of the II International Scientific-Practical Internet Conference (Poltava, April 9-10, 2020), 91-93.