Solvency and investment activity in the structure of financial security of insurance companies

The article reveals the essence and significance of the concept of "financial security of insurance companies" (FSIC) in the context of the modern financial environment. It characterizes the main financial instruments that ensure its support. It is determined that the FSIC system is complex and includes such components as solvency, investment activity, liquidity, financial stability, risk management, reinsurance, protection against fraud, cyberattacks and financial crimes, compliance with regulatory requirements, reputational and market stability, among others. Special attention is given to the analysis of financial instruments that play an important role in ensuring FSIC. In particular, the impact of solvency and investment activity, as well as liquidity and financial stability, on the overall level of financial security of insurance companies is analyzed. It is established that solvency is a fundamental element of FSIC, investment activity is a strategic component, and liquidity guarantees the operational capacity and financial flexibility of insurance companies. Financial stability is the integrated result of effective management of all FSIC components and ensures the continuity of the insurer’s operations, the ability to adapt to market changes, and the capacity to build potential. To improve the FSIC system, the article proposes to consider the interconnections between its financial components. It is noted that under current conditions, it is crucial for insurance companies to enhance the quality of investment management and strengthen internal control over the assessment of the insurer’s compliance with requirements for admissible assets, technical reserves, and regulatory capital. The article states that legislative changes occurring in the insurance market are aimed at increasing transparency and reliability of insurers, establishing clear requirements for regulatory capital, asset structure, investments, and solvency assessment. Ultimately, this ensures convergence with Solvency II standards and contributes to enhancing the level of financial security of insurance companies.