Development of the insurance market in Ukraine and forecasting its crises

Abstract

Insurance market is an important part of the financial market, the functioning of which helps to protect individuals and legal entities from the negative and stressful effects of today’s unstable economic environment. The purpose of this study is to determine trends in the insurance market in Ukraine and its potential crises.The study found that Ukraine’s insurance market constantly grows, but is volatile and in a state of concentration. The dynamics of most indicators are cyclical, with a cycle length from 4,66 quarters to 14 quarters. The randomized R/S-analysis confirmed the stability of the dynamics of Ukraine’s insurance market and its fractal similarity. Fractal similarity was proved for six out of ten analyzed indicators of the insurance market. In addition, it was confirmed that at the moment of transition from one fractal to another, a trend break occurs. Thus, the emergence of crises on the insurance market of Ukraine is associated with the self-similarity of the dynamics and the coincidence of the moments of bifurcation of certain indicators in its development. A partial crisis on the Ukrainian insurance market at the beginning of 2019 coincided with the bifurcation of the number of concluded insurance contracts, determined based on the results of fractal analysis.Calculations made it possible to conclude that potentially crisis periods for the insurance market of Ukraine fall on Q1-2 2017, Q1 2019, Q1 2020, of which only one was realized (Q1 2019). The nearest potential moments of crises on the insurance market of Ukraine may be the following periods: Q1 2023 and Q1 2026.