Investment activity of insurance companies. Concept and essence.

Insurance companies are organizations that have any form of organizational and legal type provided for by the rules of law. It can be limited liability companies, as well as joint-stock companies. The purpose of the formation of this type of insurance organizations is the implementation of the insurance business in the territory of the Russian Federation.

Insurance organizations for the implementation of insurance, in accordance with the established procedure receive a special permit. In order to ensure that the obligations assumed for insurance, insurers create insurance reserves from contributions of policyholders. The investment activity of insurance companies is based on the principles of liquidity and profitability, as well as diversification and recovery. The above-mentioned fundamental principles, named in such a process as the investment activity of insurance companies, apply to both free and occupied assets.

The investment activity of an insurance organization is determined by the fact that such organizations have both their own funds and the attracted resources. If we talk about such a process as the investment activity of insurance companies, it should be understood that own funds are the funds of the authorized capital of a legal entity - the insurance company, and those attracted are the reserves that the company has in such a process as the investment activity of the insurance organization.

Reserves are the largest source of resources of the insurer. Note that for the main types of insurance, with the exception of agreements on obtaining an insurance policy in connection with life insurance, insurance reserves are usually used by the company during the year. It is for such a period, on average, that all insurance contracts are concluded. It should also be understood that at any time, these reserves may require funds to pay an insurance event, which, in principle, may occur even next week after the conclusion of the insurance agreement. Proceeding from this, the funds that the organization receives from insurers can be invested in assets of a liquid and short-term nature. Exceptions to this circumstance, in the presence of certain conditions, may be funds collected in reserves - stabilizers and in reserves for equalizing losses. These reserves serve to provide reimbursement to clients of insurance organizations in cases stipulated by agreement of the parties.

As for life insurance, it should be noted that this type of agreement is concluded for a long period of time, literally up to 15 years. This, in turn, allows insurance companies to invest financial resources in long-term projects, on the other hand - significantly reduce the liquidity requirements for such long-term investments. Proceeding from this, life insurance activities ensure the connection of capital in a long-term order, and the means of reserve assignment, according to life insurance, are the main means of investing finance of insurance organizations in the most successful and efficient objects of investment.

However, life insurance in our country has not acquired a mass nature, as indicated by 20% of these contracts in comparison with other insurance contracts. Note that the reasons for this situation are many factors of an objective and subjective nature, in particular, the low living standards of Russians and the rejection of this type of insurance in favor of property insurance agreements. In addition to attracted funds, insurers use their own funds, which they invest in investment objects. As their own funds may act as charter and reserve, additional capital, as well as reserve funds. Actually, in this way, the activity of insurance companies under consideration is realized in modern society. Insurance of foreign investments is carried out by the laws of our country, acting in the area under consideration.

Thus, the real capabilities of an insurance company that participates in investment activity depends on its potential. Potential, in turn, is a combination of financial resources that are in a temporary free state and that are used by investors in solving such a task as profit-making. The process of fulfilling the potential in the investments of the organizations under consideration is the activity of insuring individual capital and the insurance fund. The potential of investment destination is the area of the financial reserve, which remains after deduction of expenses, borrowed funds and payments of insurance purpose. In the case of an increase in the amounts of payments mentioned above, more than an increase in the volume of the fund of the insurance organization and individual capital, it is quite possible that the investment potential will decrease with the growth of financial indicators. Investment activity of insurance companies, is a source of additional type of income of the insurer, excluding income from the implementation of insurance business.