Concentration of capital on the insurance market and solvency assumption

The subject of this paper is the analysis of the concentration of capital on the insurance market in the Republic of Serbia and the identification of critical points in the analysis of insolvency of insurers. The necessity of economic and social protection of the interests of insured persons in conditions when the business of insurance companies is objectively exposed to a large number of risks can be achieved only if insurance companies meet extremely strict solvency requirements. In addition to the requirements for the adequacy of recognized liabilities and capital adequacy requirements, insurance companies are additionally faced with a number of special requirements, including requirements relating to the matching of assets, capital and liabilities. Although capital adequacy is the strongest type of guarantee, ie the ability of the insurance company to settle its future obligations based on claims, payments of insured amounts and other obligations, in essence compliance means that the insurer has additionally met the requirements regarding the amount and relative relations between assets, capital and liabilities, within assets or liabilities, as well as the relative relationship between certain categories of assets and capital and liabilities. The aim of this paper is to point out that for the insurer, in addition to capital adequacy and adequacy of technical reserves, the existence of financial balance is essential, ie the establishment of structural and maturity matching of assets, capital and liabilities. The structure of the paper provides insight into the analysis of capital concentration and fulfllment of capital requirements of insurers operating in the insurance market in Serbia, but also consideration of solvency assumptions and insight into the methodological apparatus used in the process of insolvency and security analysis of insurers.