A Proposed Model For Financial Risk Management For Cooperative Insurance Companies

Abstract

This research aims to develop effective models to ensure the financial soundness of insurance companies in the Kingdom of Saudi Arabia, relying on financial risk management strategies as a financial tool to protect assets and capital from potential risks. This study emphasizes the need to improve financial performance evaluation mechanisms to avoid undesirable deviations. The research reviews the range of financial risks facing insurance companies, including actuarial risks, liquidity risks, and credit risks. It also addresses the importance of proposed risk management strategies, such as advance planning, continuous evaluation, and the use of advanced analytical techniques. The research also includes an analysis of the financial performance of cooperative insurance companies in Saudi Arabia, identifying the strengths and weaknesses of these companies' financial performance through a set of financial indicators. The research also presents various risk management models, such as early warning systems and financial analysis monitoring systems, with a focus on the importance of developing effective risk distribution and reinsurance strategies. The research concludes that improving financial risk management can enhance the efficiency of insurance companies and increase their financial stability, contributing to building confidence in this vital sector.