Modeling of financial mechanisms of investment activity on the example of insurance companies of the Republic of Uzbekistan

Modeling of financial mechanisms of investment activity on the example of insurance companies of the Republic of Uzbekistan
The investment strategy of Uzbek insurance companies assumes a conservative approach focused on profitability and liquidity. Investments are subject to various types of risk, including market risk, credit risk and currency risk. In addition to legal requirements for the structure of the investment portfolio, in order to comply with the acceptable level of risk, internal procedures for the risk management of the investment portfolio have been introduced. They include a system for setting and monitoring compliance with credit risk limits for a counterparty and quarterly monitoring of the currency structure of the investment portfolio.
Today's conditions of insurance activity are subject to a large number of risks. Increasingly, many insurance organizations lose their licenses and stop their activities. For this reason, from 2012 to 2021, the number of insurance companies in the world has halved.
And most likely there will be an even greater reduction by the end of 2022. Of course, the COVID-19 pandemic played a role in this, causing damage to the entire global economy as a whole. An important factor for maintaining an insurer's license is the size of the authorized capital.
Based on our research work on improving the financial mechanisms of the investment activity of the insurance market that generates financial benefits of the investment activity itself for the economy of the Republic of Uzbekistan, we decided to mathematically prove the validity of the hypothesis. To achieve this goal, we will develop a model for the formation of the investment portfolio of insurance organizations in order to improve the financial mechanisms of the investment activity of the country's insurance companies, and also propose an algorithm for the effectiveness of the investment portfolio of insurance companies.
When modeling the financial mechanisms of the investment activity of an insurer, it is important to take into account the difference in opinions of scientists - economists, we will study and apply the theory of G. Markowitz for insurance companies. There is no universal or specific model for improving the financial mechanisms of the investment portfolio of insurance organizations; it is necessary to modify the basic models for application in specific cases.
One of the tasks of investment managers, analysts of insurance companies is to form an effective investment portfolio. Of course, this formation must comply with certain principles, and they are similar to the principles of financial and credit policy for the placement of capital. These are the principles of investment security, profitability and growth of investments, liquidity.
World scientific researchers - economists consider in different ways the issues of improving the financial mechanisms of investment activity. On the one hand, certain economists associate the construction of an investment model with insurance reserves, but it is no secret that the sources of investment resources of an insurer are not only insurance reserves, but also temporarily free funds of insurance companies.
In accordance with the methodology for the formation of an investment portfolio, developed by G. Markowitz in the 1950s, we will draw up a phased implementation of the optimal model of the investment portfolio.