Vehicle insurance financial mechanism

Abstract

In Russia, over the last decade, vehicle insurance is more and more urgent. This is primarily due to an increase in consumer vehicle market, both new and used. The growth of the vehicle market says about income growth of citizens and their economic well-being. In Russia, over the last decade, vehicle insurance is more and more urgent. This is primarily due to an increase in consumer vehicle market, both new and used. The growth of the vehicle market says about income growth of citizens and their economic well-being. Relevance of vehicle insurance topic is associated with the dynamically developing vehicle market. In a market economy, vehicle insurance is a guarantee of life stability of individual, business entity, and society as a whole. The aim of this work is to develop measures that can increase the profitability of the insurance portfolio of the insurer and to reduce the unprofitableness ratio for vehicle insurance. Today, vehicle insurance share for mandatory and voluntary forms of insurance portfolio in insurance companies is growing. Processes of financial mechanism organised correctly within the company directly affect insurance portfolio profitability. In turn, insurance portfolio profitability consists of the difference between the revenues and expenditures of the company, and profitability on vehicle insurance types depends on the quality and amount of claims settlement, i.e. expenditures side. The result of the “Increased vehicle insurance profitability based on client-oriented approach”, which envisages reducing vehicle insurance unprofitableness, will serve as a more transparent rule for insurants of vehicle insurance, wage rates, factors affecting the value of insurance premium. Each client will be able to assess adequately the financial impact because of an insured event. © 2015, Review of European Studies. All right reserved.