DEVELOPMENT OF THE LIABILITY INSURANCE MARKET: THEORETICAL AND APPLIED ASPECTS

Abstract

The article examines the relevance of studying the theoretical and applied aspects of the development of the liability insurance market in Ukraine, driven by changes in the macroeconomic environment and regulatory framework, particularly under the conditions of martial law and economic instability. It is emphasized that the introduction of the updated Law of Ukraine "On Insurance" has transformed the market structure, dividing it into classes: liability for land – air – and water transport, as well as other types. This approach has expanded the range of insurable risks – from professional to environmental – and highlighted the segment’s uniqueness due to its dual mechanism: support for policyholders and compensation for victims. The article underscores that the market combines voluntary and mandatory insurance, necessitating differentiated regulatory approaches. The theoretical foundation is based on the analysis of essential characteristics: the protection of third-party interests, the diversity of risks, and the extended liability horizon, which is particularly relevant for environmental or professional cases. The social role of compulsory motor third-party liability insurance (MTPLI) underscores its significance for market stability, calling for further theoretical exploration. Practical aspects are illustrated through the analysis of indicators across segments – MTPLI, "Green Card," other motor liability, and other liabilities – using relative coefficients that reveal the market’s current state. The analyzed data indicate market resilience but reveal a trend toward a decline in contracts and payouts in the MTPLI and "Green Card" segments. These changes are linked to regulatory requirements and economic challenges that affect competition and demand. The analysis confirms market stability due to the demand for compulsory insurance but highlights the need for adaptation. It is hypothesized that the decline may result from rising policy costs and shifts in policyholder behavior, necessitating detailed investigation. The study lays the groundwork for developing recommendations to enhance market regulation.