IMPACT OF DIGITAL FINANCIAL INSTRUMENTS ON RISK MANAGEMENT OF INSURANCE COMPANIES

Abstract

The article examines the theoretical and practical aspects of digitalization of risk management in the activities of insurance companies in the context of modern economic challenges, globalization of financial markets and intensive development of information technologies. It is substantiated that traditional approaches to risk assessment, analysis and control are gradually losing their effectiveness due to the low speed of information processing, limited analytical capabilities and significant influence of the human factor. It is determined that digitalization is a key factor in the transformation of the risk management system, providing a qualitatively new level of management decision-making, increasing the efficiency of response to threats and minimizing possible financial losses. Particular attention is paid to the analysis of modern digital financial instruments, in particular Big Data technologies, artificial intelligence, machine learning, Internet of Things and blockchain, which allow for in-depth analysis of large volumes of data, identifying hidden patterns, predicting risk events and increasing the level of transparency of insurance operations. It has been studied that the use of these technologies contributes to the automation of business processes, reducing operating costs, increasing the accuracy of risk assessment and improving the internal control system. The main stages of the digital transformation of risk management are revealed, which include the analysis and audit of existing processes, the selection of optimal technological solutions, their integration into business processes, personnel training and education, as well as the implementation of continuous monitoring and improvement systems. It is proven that the digitalization of risk management is a strategic direction for the development of insurance companies, as it contributes to strengthening their financial stability, increasing the level of economic security and competitiveness in the insurance services market. It is summarized that the implementation of innovative digital solutions forms the basis for the sustainable development of insurers in the digital economy and ensures their effective functioning in the long term.