IDEAS home Printed from https://ideas.repec.org/a/mje/mjejnl/v14y2018i4p109-123.html
   My bibliography  Save this article

Investment Activity of Insurers and the State Economic Growth

Author

Listed:
  • Gulnara Kaigorodova
  • Daria Alyakina
  • Guzel Pyrkova
  • Alfiya Mustafina

Abstract

The purpose of the article is to summarize theoretical positions and practical experience regarding the existence of the relationship between the investment activity of insurers and the economic growth of the state and identify the factors that have the greatest impact on the volume of insurance investments. As a hypothesis, the main factors influencing the level of investment of insurers in the economy are recognized: the profit of economic entities, investment in fixed assets, the rate of change in the volume of insurance premiums, the total authorized capital of insurers, GDP. Methods of correlation-regression analysis, extrapolation and modeling were used. The subject of the study were the peculiarities and patterns of the formation, use and regulation of the investment potential of Russianinsurance companies in in modern economic conditions. In the course ofconducted researcha number of publications on the issues of the relationship between the investment activity of insurers and the economic growth of the state were worked out, investment potential of the insurance market of Russia was studied, the size of real investments by insurers in the economy was determined, and the forecast of future trends in changes in their volumes was made. It is proved that between the volumes of insurance premiums, investments of enterprises in fixed assets, GDP and assets placed by the insurers in the real sector there is a high interdependence that allowed to determine the important role of insurers as participants of the insurance market for the economic growth of the state. The conclusion is made that, with a steady decline in the number of insurers, their aggregate capital increases, as well as growing insurance reserves. However, their insufficient part is invested in the real sector of the economy, and a significant amount of resources falls on investments with zero profitability of operations.

Suggested Citation

  • Gulnara Kaigorodova & Daria Alyakina & Guzel Pyrkova & Alfiya Mustafina, 2018. "Investment Activity of Insurers and the State Economic Growth," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 14(4), pages 109-123.
    • Handle: RePEc:mje:mjejnl:v:14:y:2018:i:4:p:109-123
    as

    Download full text from publisher

    File URL: http://repec.mnje.com/mje/2018/v14-n04/mje_2018_v14-n04-a18.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alexander Braun & Hato Schmeiser & Florian Schreiber, 2017. "Portfolio Optimization Under Solvency II: Implicit Constraints Imposed by the Market Risk Standard Formula," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(1), pages 177-207, March.
    2. Zuzana Richterková & Petr Koráb, 2013. "Impact of insurance sector activity on economic growth - A meta-analysis," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(7), pages 2677-2683.
    3. Martin Eling & David Antonius Pankoke, 2016. "Systemic Risk in the Insurance Sector: A Review and Directions for Future Research," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 19(2), pages 249-284, September.
    4. Peter Zweifel & Christoph Auckenthaler, 2008. "On the Feasibility of Insurers' Investment Policies," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 75(1), pages 193-206, March.
    5. J. François Outreville, 2013. "The Relationship Between Insurance and Economic Development: 85 Empirical Papers for a Review of the Literature," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 16(1), pages 71-122, March.
    6. Wen-Chang Lin & Yi-Hsun Lai & Michael R. Powers, 2014. "The Relationship Between Regulatory Pressure and Insurer Risk Taking," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 81(2), pages 271-301, June.
    7. Yu-Luen Ma & Yayuan Ren, 2012. "Do Publicly Traded Property–Casualty Insurers Cater to the Stock Market?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(2), pages 415-430, June.
    8. Focarelli, Dario, 2017. "Why Insurance Regulation is Crucial for Long-term Investment and Economic Growth," LEAP Working Papers 2017/1, Luiss Institute for European Analysis and Policy.
    9. Wu, Jyh-Lin & Hou, Han & Cheng, Su-Yin, 2010. "The dynamic impacts of financial institutions on economic growth: Evidence from the European Union," Journal of Macroeconomics, Elsevier, vol. 32(3), pages 879-891, September.
    10. Damir Filipović & Robert Kremslehner & Alexander Muermann, 2015. "Optimal Investment and Premium Policies Under Risk Shifting and Solvency Regulation," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 82(2), pages 261-288, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alexander Baranovsky & Nataliia Tkachenko & Vladimer Glonti & Valentyna Levchenko & Kateryna Bogatyrova & Zaza Beridze & Larisa Belinskaja & Iryna Zelenitsa, 2020. "Non-Price Criteria for the Evaluation of the Tender Offers in Public Procurement of Ukraine," IJFS, MDPI, vol. 8(3), pages 1-15, July.
    2. Viktoriia Vovk & Lyudmila Beztelesna & Olha Pliashko, 2021. "Identification of Factors for the Development of Medical Tourism in the World," IJERPH, MDPI, vol. 18(21), pages 1-17, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Shuyan & Jia, Ruo & Zhao, Yulong & Sun, Qixiang, 2019. "Global consistent or market-oriented? A quantitative assessment of RBC standards, solvency II, and C-ROSS," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    2. Sajid Mohy Ul Din & Arpah Abu-Bakar & Angappan Regupathi, 2017. "Does insurance promote economic growth: A comparative study of developed and emerging/developing economies," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1390029-139, January.
    3. Su-Yin Cheng & Han Hou, 2022. "Financial development, life insurance and growth: Evidence from 17 European countries," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(4), pages 835-860, October.
    4. Boyer, M. Martin & Cowins, Elicia P. & Reddic, Willie D., 2019. "Portfolio rebalancing behavior with operating losses and investment regulation," International Review of Economics & Finance, Elsevier, vol. 63(C), pages 313-328.
    5. Borbála Szüle, 2019. "Systemic Risk Dimensions in the Hungarian Banking and Insurance Sector," Public Finance Quarterly, State Audit Office of Hungary, vol. 64(2), pages 260-276.
    6. Boonen, Tim J. & Liu, Fangda, 2022. "Insurance with heterogeneous preferences," Journal of Mathematical Economics, Elsevier, vol. 102(C).
    7. Relwendé Sawadogo, 2021. "The relationship between insurance and banking sectors in Sub-Saharan African: Does globalization matter?," Economic Change and Restructuring, Springer, vol. 54(1), pages 101-119, February.
    8. Subramanian, Ajay & Wang, Jinjing, 2021. "Capital, aggregate risk, insurance prices and regulation," Insurance: Mathematics and Economics, Elsevier, vol. 100(C), pages 156-192.
    9. Pradhan, Rudra P. & Arvin, Mak B. & Norman, Neville R., 2015. "The dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries," Technology in Society, Elsevier, vol. 42(C), pages 135-149.
    10. Ames Daniel & Graden Bryan S. & Sankara Jomo, 2019. "Who Estimates When It’s Not Required? the Case of Subrogation," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 13(1), pages 1-16, January.
    11. Boonen, Tim J., 2019. "Equilibrium recoveries in insurance markets with limited liability," Journal of Mathematical Economics, Elsevier, vol. 85(C), pages 38-45.
    12. Focarelli, Dario, 2017. "Why Insurance Regulation is Crucial for Long-term Investment and Economic Growth," LEAP Working Papers 2017/1, Luiss Institute for European Analysis and Policy.
    13. Durusu-Ciftci, Dilek & Soytas, Ugur & Nazlioglu, Saban, 2020. "Financial development and energy consumption in emerging markets: Smooth structural shifts and causal linkages," Energy Economics, Elsevier, vol. 87(C).
    14. Wanat, Stanisław & Papież, Monika & Śmiech, Sławomir, 2016. "Insurance Market Development and Economic Growth in Transition Countries: Some new evidence based on bootstrap panel Granger causality test," MPRA Paper 69051, University Library of Munich, Germany.
    15. repec:agr:journl:v:2(602):y:2015:i:2(602):p:103-112 is not listed on IDEAS
    16. Eling, Martin & Jia, Ruo & Schaper, Philipp, 2017. "Get the Balance Right: A Simultaneous Equation Model to Analyze Growth, Profitability, and Safety," Working Papers on Finance 1716, University of St. Gallen, School of Finance.
    17. Yana Petrova, 2020. "On cointegration between the insurance market and economic activity," Empirical Economics, Springer, vol. 59(3), pages 1127-1138, September.
    18. J. François Outreville, 2021. "Insurance and foreign direct investment: a review (or lack) of evidence," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(2), pages 236-247, April.
    19. Tochukwu Timothy Okoli & Ajibola Rhoda Oluwafisayomi, 2019. "Investigating the Banking Sector Development Transmission Mechanism of Financial Development to Growth: Evidence from Sub-Saharan Africa (SSA)," Journal of Economics and Behavioral Studies, AMH International, vol. 11(2), pages 120-131.
    20. Rajat Deb & Kanchan Kumar Nath & Mukesh Nepal & Sourav Chakraborty & Kiran Sankar Chakraborty, 2021. "Do People Choose Life Insurance for Protection or for Saving?," Metamorphosis: A Journal of Management Research, , vol. 20(1), pages 35-44, June.
    21. Filiz ERATAŞ-SÖNMEZ & Yağmur SAĞLAM, 2019. "The Relationship between Financial Development and Economic Growth for Developing Countries: Panel Causality Analysis," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(42).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mje:mjejnl:v:14:y:2018:i:4:p:109-123. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nikola Draskovic Jelcic (email available below). General contact details of provider: http://www.mnje.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.