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Dmitry Gordienko

Faculty of computer science and technology (CST)

Department of Automated Control Systems (ACS)

Speciality Information Control Systems and Technologies

The computerized system of distribution of financial flows in terms of the insurance company

Scientific adviser: Ph.D., Victoria Svetlichnaya

Resume Abstract

Abstract

Content

• Introduction
• 1. Theme urgency
• 2. Statement of the research problem
• 3. Solution of the problem and research results
• Conclusion
• References

Introduction

Insurance company – organization providing insurance services, acting as the insurer, ie receiving a duty to indemnify the insured damage when the insured event. It provides life insurance, health, property, liability, etc.

The activity of the insurance company based on the creation of funds on the basis of the insured funds received in the form of premiums. These funds are only temporarily, for the duration of the insurance contracts are held by the insurance company, and then used for insurance payments are converted into revenue base (subject to passing the break–even contracts) either return the insured to the extent provided by the terms of the contract.

One of the features of the insurance business is that, unlike the sphere of production, where the first is cost commodity producer by output, and then compensates them for the proceeds from its sale, the underwriters first accumulate funds in the form of insurance premiums, creating the necessary insurance reserves and only later when the insured bear the costs associated with insurance payments. As a result, insurance companies have the opportunity for a certain, sometimes very long, time to dispose of the means received from clients. In addition, insurers dispose of their existing share capital and other private funds. This creates the possibility and the need for insurers investing activities, which is another source of profit insurance companies and in some cases even compensate for those losses which insurers can be performed directly from the insurance business.

1. Theme urgency

The increase in profit and search for the optimal method of distribution of funds are the most important tasks for any company, including insurance.

Forecasting revenue for various types of insurance and insurance payments will predict with some accuracy the future profit. This in turn will enable the most optimal way to carry out investment activities of the insurance company.

2. Statement of the research problem

Insurance companies operate on different types of insurance. Usually they have their branches in different regions of the country and redistribute large amounts of funds in a fairly dynamic environment. Moreover, the general solution for this distribution is not always enough optimally. Therefore there is a need to develop a decision support system that will perform the following functions: accounting of receipts and disbursements by type of insurance, forecasting future revenues and expenditures, determining the amount and term of investment.

3. Solution of the problem and research results

Identified the following basic functions of the system:

– accounting for income insurance;

– accounting for payments on insurance;

– revenue forecast for future periods;

– forecast payments for future periods;

– determining the amount and term of investments.

The functional structure of the system is shown in fig. 1.

Proceeding from the given functions, there is a need of forecasting of two types of financial streams are receipts and payment. Researches of these processes and methods of their possible forecasting were conducted.

The example of receipts on one of types of insurance is given in fig. 2.

From figure it is possible to draw a conclusion that the indicator of receipts possesses seasonal komponenty and a trend. Besides, it depends on a number of external factors, for example, location (the country, area, the city), time (year, month), an average salary of the population, density of population of the city, a publicity expense, a rate of inflation, a rate of the main foreign currencies and many others.

As a result of the analysis of methods of the forecast the conclusion that simple methods of forecasting of temporary ranks are unacceptable was drawn. That is supposed to consider a number of factors, possibilities of use of multiple regression and neural networks were investigated.

In any case such number of factors is too big as it negatively influences forecasting process because of a big error and bulkiness of mathematical model. The method of pair correlation was applied to reduction of their quantity and selection of the most significant.

Let's compare available information on receipts with statistical data on factors which can influence output size. Basic data are given in tab. 1.

Table 1 – Basic data

On the basis of these data calculations of coefficient of correlation for factors on the following formula were carried out:

, where

– average values,

– mean square deviation on X and Y respectively.

The following values of coefficients of correlation for the X1 and X2 variables were as a result received:

It means the following:

The output variable Y has a certain correlation dependence on the X1 variable (an average salary) from what follows that with a growth of a salary have to increase and receipts from insurance premiums, and the X2 variable (number of sales) has almost direct dependence from an output variable Y (insurance premiums).

The received values of coefficient of correlation allow to include with full confidence these factors in the list of the significant. Conclusions for other variables are similarly drawn. The following significant factors were as a result selected:

– number of sales;

– average salary;

– number of insured events;

– course of the main currencies;

– time (year, month);

– average cost of the vehicle;

– number of stealings.

On the basis of the allocated factors it is possible to solve the main problem – forecasting of contributions and payments for the best distribution of finance of insurance company.

Conclusion

The functional structure of system of DSS is designed at distribution of financial means of insurance company. Its main functions are allocated. The analysis of methods of forecasting of available process is carried out, need is proved and the assessment of all factors which can influence forecasting is carried out. The stated material is the basis for further development of DSS, in particular its mathematical and information support.

In writing this abstract master's work is not yet complete. Final completion: winter 2013–2014. The full text of the work and materials on the topic can be obtained from the author or his head after that date.

References

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