The COVID-19 pandemic during 2020 is the cause of the global health, economic, financial, and social crisis, which in terms of scale and possible harmful consequences has not been recorded since the global financial crisis in 2007–2008. For the BiH economy, risk exposure is particularly pronounced in terms of increased market risk of illiquidity of the economy, public and private companies, more precisely, illiquidity risk of (re) insurance company. The paper actualizes the application of modern methods in the management of the investment portfolio of a (re) insurance company, primarily methods for managing the risks of the securities portfolio and methods for managing credit risk. The starting point in this paper is the current domestic regulations on insurance, as well as the prescribed methodology for assessing the main risks and for quantitative analysis of the impact of the investment portfolio on the solvency of (re) insurance companies in BiH. To assess the risk of the securities portfolio, a model of variance and standard deviation was used, which show the degree of deviation of the security’s return from the expected average return, while the return (positive, or negative, or zero) is measured by rising or falling or keeping the price of the security at the same level between two measurement periods. The relationship between yields between two securities is measured by the correlation coefficient and covariance. © 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.
Insurance Investments Management—An Example of a Small Transition Country