FINANCIAL MODELING OF CASH FLOW MANAGEMENT OF THE INSURANCE COMPANY

Abstract

The article is devoted to the study of understanding the cash flow management of an insurance company. Accordingly, financial modeling of cash flows has been identified as the main management method. Therefore, the article aims at studying and implementing the financial modeling of cash management of an insurance company. The basis for the cash flow optimization model (OCF-model) is selected and an algorithm for constructing such a financial model is proposed. Using the proposed model to assess the effectiveness of the insurance company's cash flows in practice allows us to identify the most important factors influencing their effectiveness and calculate the degree of this influence. The insurance company was chosen as the object of the study since the insurance market in Ukraine is now in a difficult position. Thanks to the active process of European integration, it is important for the country to improve the state of the insurance market and overcome the crisis. Scientific research was carried out using the following methods: systematic, integrated approach - in the study of the process of managing financial flows of an insurance organization; coefficient method - to compare and interpret evidence on the assessment of performance indicators of an old-age company; methods of economic and mathematical modeling - to predict the effectiveness of the insurer's cash flows; tabular-graphical method - to visually display the dynamics and structure of individual indicators. The proposed financial model of cash flow management of the insurance company allows exploring the factors influencing the current cash flow efficiency of the insurer and determine the forecast parameters of the cash flow efficiency ratio. Testing the multiplicative model for assessing the effectiveness of cash flows based on empirical data allows highlighting the degree of influence of the most important factors on their efficiency. Thus, a decrease in the level of the integral indicator of cash flow efficiency of OJSC IC SK PZU Ukraine caused changes to decrease the following indicators: cash flow efficiency ratios, sufficiency and profitability of net cash flow. Therefore, the insurance company must take appropriate measures to prevent the predicted deterioration of cash flows.