Theoretical Aspects and Development of the Mechanism for Risk Management in Small- and Medium-Sized Business

Modern scientific research in the field of risk management is mainly devoted to general questions of the market theory of risk management, including qualitative risk analysis, protection of the rights of property owners and the study of the problems of selection of the best strategies for profitable market investments. The development of risk management mechanisms for small- and medium-sized businesses in Lithuania compared to other European markets is happening too slowly. The situation is aggravated by unstable situation of the field itself, corrupted officials and the lack of advanced control strategies for internal and external risk management in organisations. All these factors confirm the need to develop new management tools in the field of risk management at such enterprises. The aim of this article is to develop the mechanism of risk management of small and medium-sized businesses and justify it scientifically. The methodology of the research is based on the principles of objectivity using methods of comparative, logical, mathematical statistics and system-structural analysis

The Effect of Service Clusters on the Sustainable Economic Development

Clusterization has been named as one of the priorities of the development strategy of many European Union countries. Clusterization experts have already hypothesized that clusters of various economic activities are important not only in the formation of regional policy, but they also in a complex way stimulate the whole country's economic growth from job creation to the development of intellectual property to new innovative industries. These realities show that cluster activity and its results are important not only for cluster participants, but also for the economy of the country in which clusters operate. However, there are currently no reliable and effective tools to validate this hypothesis. In the analysis of the problem and in order to deepen the theoretical knowledge of the object under study, this paper analyses and summarizes systematic, logical and comparative scientific literature, scientific studies, strategic documents and legal acts. Therefore, the purpose of this paper is to provide a theoretical overview of the currently available knowledge on service clusterization and sustainable economic development, to demonstrate the acute absence of relevant theoretical foundations and linkages that would allow to analyse these phenomena, and propose a methodological approach that would allow to expand this field of study

The Mechanisms of the Development of the Reinsurance Market through Mergers and Convergences

The paper proposes a theoretical basis of the classic view of the economic organization for the companies in the reinsurance market in the developing countries, develops options for the structure of a company in the future. Moreover, a mechanism of interaction is developed between reinsurers and banks, including areas of institutional changes, the use of complex financial instruments and the creation of actively working interactive system, aimed at increasing the market capitalization of these market participants

The Evaluation of Trade Credit Insurance in Lithuanian Business Market as a Credit Risk Management Tool

In today's trade, the vast majority of commercial transactions in both domestic and international trade are concluded by applying trade credit terms. The aim of this article is to analyse the trade credit insurance and, according to the methodology, to evaluate it as a credit risk management tool in the context of Lithuanian business market. The authors have proposed a methodology that combines theoretical and practical research methods. First of all, with assistance of qualitative analysis, the alternative external credit risk management tools were examined. Such analysis allows not only to identify the advantages, disadvantages and benefits of researched risk management tools but also to assess the efficiency and rationality of trade credit insurance in the context of alternative methods. In order to carry out an assessment in the practical aspect, considering the lack of statistical data, it was decided additionally to perform an expert evaluation. After performing an assessment of trade credit insurance, it was concluded that in international trade, with a large buyer portfolio and high sales volume, the trade credit insurance becomes the most effective and rational way to manage credit risk, which eliminates the losses because of the debtor's insolvency or bankruptcy, manages countries and sector's risks and helps to discipline the debtor, what determines the decline in overdue accounts frequencies, amounts and volumes

The Effect of Service Clusters on the Sustainable Economic Development

Clusterization has been named as one of the priorities of the development strategy of many European Union countries. Clusterization experts have already hypothesized that clusters of various economic activities are important not only in the formation of regional policy, but they also in a complex way stimulate the whole country’s economic growth from job creation to the development of intellectual property to new innovative industries. These realities show that cluster activity and its results are important not only for cluster participants, but also for the economy of the country in which clusters operate. However, there are currently no reliable and effective tools to validate this hypothesis. In the analysis of the problem and in order to deepen the theoretical knowledge of the object under study, this paper analyses and summarizes systematic, logical and comparative scientific literature, scientific studies, strategic documents and legal acts. Therefore, the purpose of this paper is to provide a theoretical overview of the currently available knowledge on service clusterization and sustainable economic development, to demonstrate the acute absence of relevant theoretical foundations and linkages that would allow to analyse these phenomena, and propose a methodological approach that would allow to expand this field of study

Theoretical Aspects And Development Of The Mechanism For Risk Management In Small- And Medium-Sized Business

Modern scientific research in the field of risk management is mainly devoted to general questions of the market theory of risk management, including qualitative risk analysis, protection of the rights of property owners and the study of the problems of selection of the best strategies for profitable market investments. The development of risk management mechanisms for small- and medium-sized businesses in Lithuania compared to other European markets is happening too slowly. The situation is aggravated by unstable situation of the field itself, corrupted officials and the lack of advanced control strategies for internal and external risk management in organisations. All these factors confirm the need to develop new management tools in the field of risk management at such enterprises. The aim of this article is to develop the mechanism of risk management of small and medium-sized businesses and justify it scientifically. The methodology of the research is based on the principles of objectivity using methods of comparative, logical, mathematical statistics and system-structural analysis

Lietuvos draudimo rinka ir globalizacijos sąlygos

Surmounting the traditional capitalism, the capitalist private property and estrangement takes place by way of shifting from industrial economy to an economic system based on knowledge and information, formation of a new system of values of the modem man and transformation of a national state under the influence of processes of globalization of the economy and the society. The global economy and international financial markets arc the main indications of a forming new world order and a net-like boundless global informational society.One of the basic features of the informational economic system or informational economy of the end of the 20th - beginning of the 21st century is transformation of financial institutions into centers of national and international accounting and financial globalization. The positive and negative appraisals of financial globalization arc the emergence of a new configuration of the world economy: transfer from the regulated state system to the liberal model of money flow management. The main players on that financial market arc the global institutional investors in the new institutional forms of financial conglomerates uniting the banks, insurance. pension and investment (mutual, hedge, venture) funds as well as other companies of the financial environment - institutions distributing and re-distributing the financial resources of the world.The financial market of the world consist’ of an aggregate of financial and crediting organizations that play the role of mediators in re-distributing the financial assets of the world between the creditor and the debtor, the sellers and the buyers of financial resources. The world insurance market is a part of the financial market existing as an independent economic phenomenon and forming as an aggregate of national and regional markets, undergoing a number of changes under the influence of the globalization process.Globalization of the world insurance market expresses itself as a process of obliterating legal and economic barriers between national insurance economies caused by the changes in the world economy and aiming at forming a global insurance space. This phenomenon demonstrates itself in the following processes actively going on since the 90-ies of the 20th century:1. Concentration and centralization processes reflecting in:• concentration of the world insurance and re-insurance capital which expresses itself in mass mergers, uptakes and absorptions, formation of strategic alliances of insurance and re-insurance companies on the global insurance market, as well as formation of traditional insurance companies on this has is;• wide-scale fusion of insurance, bank and crediting capital leading to formation of transnational financial groups;• concentration on the market of insurance mediators expressing itself in formation of huge international insurance brokerage companies by way of merging and buying up small and medium companies;• concentration of users of insurance services expressing itself in growing capitalization and changing their demand for traditional insurance services;2. Modification of traditional forms and types of insurance services, development of new insurance products:• fusion of insurance and financial services and emergence of alternative insurance and re- insurance, securitization as a new way of organizing insurance coverage based on asset management of the insurers and the insurants;• changing demand fur “mass” insurance services, in particular activation of the insurers participation in pension insurance against the background of demographic aging of the population in countries of developed economy, crisis of the concept of the “welfare” state and reduced participation of the state in payment of old-age and disability pensions;• expansion of the sphere of usage of the private commercial insurance: insurance against political and military risks, insurance of credits and guaranties. insurance against informational risks. etc.3. Change of market environment under conditions of:• full computerization of producers and users of insurance products and implementation of the Internet for sales/purchase of insurance and reinsurance services;• increasing devastation of insurance losses resulting from the development of urbanization, technical progress, cost increase of private and corporal property, influence of global climate changes;• expansion of access to foreign insurers and re-insurers on previously “closed” national markets of the countries of Central and Eastern Europe, Latin America and Asia;• universal liberalization of sales of insurance products caused by liberalization of state and supra-state regulation of financial and insurance markets.The process of globalization and convergence, alongside with opening wide access possibilities for separate countries to the financial resources of the world, contains in itself unforeseen risks related to weakening of regulation by the state and uncontrolled transfer of capital through state borders.Simultaneously with liberalization of state regulation, common universal “play rules” for the players of the global financial market arc being worked out, because “ ... one of the tasks for the 21st century is to find a way to combine some national sovereignty with financial unification ... ” [6, p. 29]. The latter facilitates conversion of national markets into constituting parts of the world market. A number of intergovernmental institutions and international financial organizations are engaged in working out and implementation of common standards and codes of behavior for all spheres of financial activities. also in the insurance sector.The financial globalization and formation of financial conglomerates of various organizational-institutional forms strengthens national, international and regional currency and financial instability. Therefore in scientific circles a question is regularly raised about the necessity of additional instruments for regulation on the world level.Straipsnyje aptariamas Lietuvos draudimo rinkos formavimasis pasaulinės globalizacijos sąlygomis. Nagrinėjamas klausimas yra aktualus, kadangi kiekvienos valstybės viena iš normalaus egzistavimo ir finansinių santykių reguliavimo sąlygų yra tinkamas draudimo verslo organizavimas. Tyrimas yra analitinio pobūdžio, atliktas remiantis Lietuvos Respublikos įstatymais, naujo Draudimo įstatymo projekto, Lietuvos ir užsienio šalių autorių publikacijomis šia aktualia Lietuvos draudimo verslui tema

Financial reinsurance: the effective tool of insurance company’s stability management

Financial reinsurance has been chosen as an object of the article, as one of the kinds of reinsurance security. The author’s object of research is theoretical substantiation and problems of practical realization of financial reinsurance operations. In the eighties of the last century, the trend of incorporation of insurance companies showed up, and as a consequence of this global process, their receptivity increased, and that provided companies with the opportunity to sustain or leave the great share of risks for themselves. Due to that, the demand for insurers’ reinsurance decreased, and this had a negative influence on development of reinsurance market. A number of large losses, which occurred in the continent of America, had substantially undercut possibilities of reinsurance. The way out of that situation could be proposals for a brand new product of reinsurance, which would raise interest in insurance companies. Financial reinsurance became that product. The objective of this article is constituted of analysis of three aspects of financial reinsurance: risk theory and its reflection in balance sheet, as well as its influence on possibility of financial stability and solvency of insurance companies, and differences and advantages of financial reinsurance against traditional reinsurance are presented. In the article there were attempts made to connect the theory and practical aspects of financial reinsurance forms and methods used nowadays. First time in Lithuanian literature the essence is revealed and definition of financial reinsurance is provided, systematic research of forms and methods of financial reinsurance is performed, trends and objections to its development are revealed. Practical significance of the findings is that the material of the article can be applied in Lithuanian insurance companies as methodical recommendations when concluding financial reinsurance contracts, since one of the main functions of traditional and financial reinsurance is improvement of financial state of insurance companies. Financial reinsurance performs not only the same functions as traditional reinsurance, but also provides an insurer with the additional financial advantage. The major task of the state is security of propriety interests of the insureds. In this respect, there is a need to acknowledge the mechanism of financial reinsurance as the one having its own place and significance for this process. Insurers’ motives classification while concluding one or another financial reinsurance contract is of an extreme significance in the article. Out of many contracts, the ones which can be really applied in current Lithuanian practice are distinguished, including those contracts the demand for which is possible only during the stage of corresponding development of insurance market. Article in Lithuanian. Finansinis perdraudimas: efektyvi draudimo kompanijos stabilumo valdymo priemonė Santrauka. Straipsnio objektu pasirinktas finansinis perdraudimas kaip viena iš perdraudimo apsaugos rūšių. Autoriaus tyrimo objektas yra teorinio pagrindimo ir finansinio perdraudimo operacijų praktinio realizavimo problemos. Šio straipsnio tikslas - išnagrinėti tris finansinio perdraudimo aspektus: rizikos teorijos ir jos atsispindėjimo balanse, taip pat jos įtakos finansinio stabilumo ir draudimo kompanijų mokumo galimybei, pateikti finansinio perdraudimo skirtumus ir pranašumus, palyginti su tradiciniu perdraudimu. Straipsnyje pabandyta susieti teoriją ir šiandien taikomų finansinio perdraudimo formų ir metodų praktinius aspektus. Pirmą kartą lietuviškoje literatūroje atskleista esmė ir pateiktas finansinio perdraudimo apibrėžimas, atliktas sisteminis finansinio perdraudimo metodų ir formų tyrimas, atskleistos tendencijos ir jo vystymosi prieštaravimai. Gautų rezultatų praktinė reikšmė yra ta, kad straipsnio medžiaga gali būti panaudota Lietuvos draudimo kompanijose kaip metodinės rekomendacijos, sudarant finansinio perdraudimo sutartis. Nes viena iš pagrindinių tradicinio ir finansinio perdraudimo funkcijų - pagerinti draudimo kompanijų finansinę padėtį. O finansinis perdraudimas atlieka ne tik šias funkcijas, kaip ir tradicinis perdraudimas, bet ir suteikia draudikui papildomą finansinį pranašumą. Reikšminiai žodžiai: finansinis perdraudimas, draudimas, perdraudimas, draudėjas, draudikas, perdraudikas