ANALYSIS OF THE IMPACT OF STATE DIGITAL TRANSFORMATION ON THE INSURANCE MARKET OF UKRAINE: NEW OPPORTUNITIES AND RISKS

Abstract

In the rapidly changing information landscape and technological innovations, digital transformation has become a key factor in the development of the financial and insurance sectors. This article explores the impact of state digital transformation on the insurance market in Ukraine, analyzing the new opportunities it provides for insurers and clients, as well as the risks associated with these changes. The article examines aspects such as the use of big data, artificial intelligence, and digital platforms in insurance, along with issues of cybersecurity and data confidentiality. The main focus is on researching various strategies to reduce cyber risks, providing the reader with an overview of the most effective methods and approaches, such as implementing appropriate legislation, developing a state security strategy, and establishing a coordination center. However, despite the best efforts to prevent incidents, there remains a probability of cyberattacks. Consequently, cyber risk insurance becomes increasingly relevant. The article also highlights the benefits and nuances of insurance in this field, offering readers information on how to choose the right insurance plan, what risks can be covered, and how insurance can aid in recovery after cyber incidents. The article elucidates the essence of the concept of "cyber risk." Specifically, it reveals various scientific approaches to its interpretation, namely legal, statistical, strategic, and economic. Taking various perspectives into account, the article provides an author's definition. The subject of the article provides an opportunity to explore the current challenges and opportunities that the insurance industry faces in the era of state digital transformation. It may lead to an understanding of how insurance companies can adapt and utilize modern technologies to improve their efficiency and customer service. Objective: the aim of the article is to analyze the impact of state digital transformation on the insurance market in Ukraine to identify possibilities for reducing potential cyber threats and ensuring maximum protection in case of their occurrence through insurance. Methodology: the proposed article particularly focuses on analyzing aspects of state digital policy aimed at shaping Ukraine's insurance market to identify new opportunities and risks. Scientific novelty: it is proven that an essential problem in the development of Ukraine's insurance market is the effective implementation of digital innovations. Ensuring digital innovations is impossible without the implementation of state policy regarding digital transformations in the insurance sector. Conclusions: state policies aimed at digitizing insurance processes create new opportunities for Ukraine's insurance market. However, risks arise. It is established that the main results of digitization's influence are the improvement of customer experience; machine learning enables insurance companies to more accurately determine risks, develop more precise pricing models, and manage insurance portfolios; digital robots and bots provide faster and more precise customer service; blockchain technology simplifies data verification and authentication processes; digital transformation attracts new participants to the insurance market, such as startups and technological companies offering innovative insurance products and services. It is determined that state digital transformation leads to the emergence of new insurance risks, such as DDoS attacks, phishing, and cyberattacks. It is stated that state initiatives to combat cyber risks are effective. However, it is also noted that the most reliable and effective way to protect against these risks is insurance.