Current Situation and Prospects of Agricultural Insurance Development in Ukraine

Introduction. Insurance is an integral part of modern business processes and the most important way to minimize economic losses due to adverse events and phenomena. By facilitating the redistribution of risks between economic agents and the accumulation of losses through insurance, it (insurance) allows to increase the efficiency of the economy as a whole and its individual elements. The role of insurance is particularly important in the agricultural sector, as it is mostly prone to natural and climatic risks. As a financial institute of insurance for the domestic economy it is at a rather low level in comparison with foreign experience: a narrow range of insurance products, primitive technologies, underdeveloped infrastructure, does not fully take into account the specificity of the agricultural sector. In many ways, the development of insurance agribusiness is constrained by insufficiently developed theoretical and methodological issues and, consequently, by the poor validity of its priority areas. Noting that the problems of formation and development of the market of insurance services in the agrarian sphere are quite deeply theoretically and practically investigated, it should be acknowledged that in the present conditions many issues related to the specifics of the development of insurance market institutions require further research, including: development of methodological approaches to determine the main directions of development of agricultural insurance; substantiation of the concept of insurance development in agriculture of Ukraine. Purpose. Theoretical substantiation of priority directions of the agricultural insurance system development and the formation of practical recommendations on the basis for their implementation are observed. Results. The question of the current state of agricultural insurance in Ukraine, which is developing, mainly in quantitative terms due to the expansion of insured areas, nomenclature of insurance objects, is considered. Improving the quality of industrial risk insurance, which is reflected in the effective use of funds for these purposes, the application of reinsurance, differentiated insurance rates, the implementation of insurance payments in the presence of real damage and in the amount stipulated by insurance conditions, remain unresolved. The reasons, why agricultural insurance is not required is that the current agricultural insurance system has a number of significant disadvantages. The biggest problems remain of financial and economic nature, which include, first of all, the difficult financial position of agricultural producers, high loss of agricultural insurance and insufficient development of the reinsurance market. The low solvency of farmers determines the need for state support, since the need for borrowed funds to pay insurance premiums, even in the presence of subsidies, is maintained when underinsured, and under the insurance against total loss of crops, and in the case of combined tariffs. Another defining reason why agro - insurance has not yet become an effective financial protection tool for the industry is the lack of awareness among agricultural producers about its capabilities. Because of this, the level of insurance coverage is often misjudged at the stage of concluding an insurance contract. The current state of agricultural producers' insurance market, the price of current insurance tariffs and conditions of using insurance products, the size of the franchise, insurance coverage and insurance indemnity in case of unfavorable conditions for salt are analyzed as well as the differences in periods of crops acceptance for insurance. The differences between index and mutual insurance from traditional ones, the characteristics and methods of index calculation, the possibility of combining manufacturers to cover the risks that fall out of index insurance coverage are established. The level of application of risk management instruments, reasons for refusal of insurance products, opportunities and conditions for improvement of the state on the agro insurance market, application of reinsurance operations with insured acreage of agricultural crops, combination of different types of agricultural insurance, advantages and disadvantages of alternative insurance instruments, possibilities for insurance options, are determined as well as their widespread use in agricultural insurance. Conclusions. The necessity of using innovative insurance instruments in the financial activity of agricultural producers, the necessity of the state policy improvement in the field of agricultural insurance and creation of the necessary conditions for the development of the agrarian insurance market that could satisfy the needs of all participants of the insurance market were proved..

Medienart:	E-Artikel

Erscheinungsjahr:	2020
Erschienen:	2020

Enthalten in:	Zur Gesamtaufnahme - volume:19
Enthalten in:	Modern Economics - 19(2020), Seite 46-51

Sprache:	Englisch ; Ukrainisch

Beteiligte Personen:	Dranus V. [VerfasserIn] Dranus L. [VerfasserIn]

Links:	doi.org [kostenfrei] doaj.org [kostenfrei] modecon.mnau.edu.ua [kostenfrei] Journal toc [kostenfrei]

Themen:	Agricultural insurance Business Finance Index insurance Mutual insurance Reinsurance Weather index Yield index

Förderinstitution / Projekttitel:

PPN (Katalog-ID):	DOAJ005403294