Reinsurance Management in the Global Financial Market Cyclicity Conditions

Abstract

The globalization of economic relations and the integration of Ukraine into the world financial market have significant impact on decision-making in an insurance company in Ukraine. These aspects actualize the study of the insurance companies’ activities in the conditions of world financial market cyclical development, and it determines the purpose of the article. The purpose of the study is to develop theoretical and methodological provisions and practical recommendations for managing reinsurance in conditions of cyclical development of the global financial market. Solving the tasks set in the research was carried out using scientific methods of analysis, synthesis, induction, deduction, and analogy – to study trends in the development of the Ukrainian insurance market; logical generalization – to determine the peculiarities of reinsurance management in conditions of cyclicity of global financial markets; comparative and statistical analysis – for analyzing the share of premiums belonging to non-resident reinsurers; Fourier analysis – for analyzing the cyclicity of the development of the global financial market and the reinsurance market in Ukraine. Global business activity develops cyclically. The first cycle is long-term and consists of 14 quarters. Within the long-term cycle, harmonics of a shorter cycle, namely 1 year, were detected. The reinsurance market in Ukraine also develops cyclically. The length of the cycle is 4 quarters. It was established that the peaks of the harmonic oscillations of the development cycle of domestic reinsurance and the world cycle of business activity are antiphase, that is, the phase of the oscillations differs by half a period. The length of the domestic reinsurance development cycle and the global business activity cycle are equal, and the distance between the extremes of the cycle functions is 2 quarters. The practical value of the obtained results is that the established relationships between the cycles and phases of the global business activity development and the reinsurance market of Ukraine provide a toolkit for making management decisions regarding the modeling of a reinsurance portfolio effective structure in the insurance company.