The Key Indicators of Efficiency of Functioning of Insurance Market for the State

The Key Performance Indicators (KPIs) determine the effectiveness of market participants. The use of the KPIs has so far not been used for analysis of the Ukrainian insurance market. The urgent problem is to determine how the efficiency of the insurance market should be assessed from the State’s point of view. The presented work is a continuation of a series of works devoted to the development of the KPIs for participants of the Ukrainian insurance market. The aim of the article is to develop a system of key indicators of efficiency of functioning of the Ukrainian insurance market for authorized government bodies based on macro- and micro-economic indicators, which would provide a comprehensive description of the results achieved by participants of insurance system under the influence of government administration and regulation. The amount of the KPIs is optimally limited to avoid secondary indicators that have small impact on performance and to data accessibility for the KPI calculation using data from insurance companies and a State authorized body. The paper for the first time develops and classifies the KPIs of functioning of the Ukrainian insurance market for the State, including: percentage of insured population, percentage of insured business; level of insurance indemnity; solvency margin of insurers; margin of monopolization; margin of competition; share of insurance in the formation of the country’s GDP; efficiency of insurance activity; volume of tax payments to the State budget. Each KPI has a mathematical formulation and a condition for ensuring efficiency. In 2017–2018, conditions for ensuring efficiency of Ukrainian insurance market were implemented only for a few KPIs: the percentage of insured business; the solvency margin of insurers; the margin of monopolization and competition for the non-life insurance market; and the efficiency of insurance activity. Calculations for other KPIs showed the inefficiency of actions of the authorized government bodies.