Analysis of Financial Stability of Reinsurance Company

Nowadays there are a lot of researches which are directed to analyze the financial stability of Russian insurance companies, but there are no scientific works in the sphere of reinsurance. That was the reason to study this topic and make a serious empirical research. The aim of this work is to reveal factors, which have a big influence on the financial health of Russian reinsurance companies. The data used in this study includes 26 Russian reinsurers and their financial results for three years (2013-2015). The present research consists of two-stage analysis: coefficient and regression. To make the coefficient analysis the technique of VTB-24 bank, which means the counting of 12 financial coefficients, has been used. To make the regression analysis binary models (logit and probit) was formed. As a result, we have found, that such kind of variables as a firm size, the ratio of own capital to assets and combined ratio play an important role during the estimation of the financial health of Russian reinsurance companies. The first two variables has a positive relation to the financial stability, when the other – negative. At the end of the work there is a description of the total developed model which can define the financial status of the Russian reinsurers in the future.