Life Insurer Financial Management: Space Risk Analysis in the Case of Poland

The aim of this paper is to demonstrate the effect of the regional death risk differentiation approach upon the financial management and profitability of life assurance companies. Such an aim involves answering the question of whether the application of regional death risk differentiation in the process of financial management at insurance companies can improve their financial performance? The above issue was explored on the basis of empirical research undertaken by the author. The research followed the pattern of premium differentiation for the main categories of assurance by regions in Poland. The research reveals that the application of the regional differentiation method indisputably results in the improvement of financial performance of insurance companies, without compromising the fundamental principles of the insurance business, (principle of equilibrium). By employing the regional differentiation method, an insurance company optimises its profitability, while at the same time maintaining the structure of deposits and investments.