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Assimilation Of Investment Potential Of Insurance Companies Through Government Securities

Author

Listed:
  • Angela TIMUS

    (INCE)

  • Cristina UNGUR
  • Irina RABOSAPCA

Abstract

Investments in fixed capital and human capital represent a reliable way to the economic development of the Republic of Moldova. The acceleration of investments can be achieved through an active and viable financial market. The stimulation of institutional investors and of the process of securities issuing and trading is a strategic development tool for the country. The purpose of the study is to analyze insurance companies as institutional investors and to present opportunities for investment in state securities. Markowitz and Sharpe’s theories of efficient investment portfolios selection based on profitability and risk formed the theoretical and methodological framework. The research is based on data from the National Commission for Financial Markets, on the reports of Moldova’s Ministry of Finance and on the statistics from National Bank a National Bureau of Statistics. For secondary analysis, data reports from international organization such as OECD and Insurance Europe and International Monetary Fund have been used. The study was conducted by classical methods of the economic and financial analysis. The results of research have shown that government securities are the most profitable of all securities issued on the primary financial market in the Republic of Moldova. In recent years, interest rates at the state securities are extremely attractive, more attractive than returns on investment in other areas. State securities are the safest investment because the guarantor of this investment is government. That is why state securities are a very attractive investment area for insurance companies. The stimulation of the investment activity in the state can be achieved by using the primary market of government securities as an investment tool for capitalization of the investment potential of the insurance market

Suggested Citation

  • Angela TIMUS & Cristina UNGUR & Irina RABOSAPCA, 2017. "Assimilation Of Investment Potential Of Insurance Companies Through Government Securities," ECONOMY AND SOCIOLOGY: Theoretical and Scientifical Journal, Socionet;Complexul Editorial "INCE", issue 1-2, pages 124-132.
    • Handle: RePEc:nos:ycriat:275
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    References listed on IDEAS

    as
    1. William F. Sharpe, 1963. "A Simplified Model for Portfolio Analysis," Management Science, INFORMS, vol. 9(2), pages 277-293, January.
    2. Stephen A. Ross, 2013. "The Arbitrage Theory of Capital Asset Pricing," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 1, pages 11-30, World Scientific Publishing Co. Pte. Ltd..
    3. Raffaele Della Croce & Juan Yermo, 2013. "Institutional Investors and Infrastructure Financing," OECD Working Papers on Finance, Insurance and Private Pensions 36, OECD Publishing.
    4. John Lintner, 1965. "Security Prices, Risk, And Maximal Gains From Diversification," Journal of Finance, American Finance Association, vol. 20(4), pages 587-615, December.
    5. TIMUS, Angela & UNGUR, Cristina, 2013. "The Insurance Market Of The Republic Of Moldova In Terms Of Investment Potential," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 17(2), pages 31-43.
    6. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    investments; insurance companies; government securities; financial market; public debt.;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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