FREE CASH FLOW AND VALUATION OF THE INSURANCE COMPANY

In the past three years the notion of an economic depression has become an absolute record holder in terms of its occurrence in media worldwide. At the beginning, after its breakout, we strove to understand its causes and consequences, yet we had no idea about its scale, depth or time duration. And it is not different today. Despite consistent scrutiny of this new global phenomenon, which has shaken the so far unshakeable pillars of the strongest economies in Americas, Europe and Asia, we still have not understood its substance, especially in terms of possible evolution alternatives. The depression has also afflicted Slovakia, which has become a victim of its secondary consequences. Fortunately, the Slovak economy ran into the depression like an engine in full motion. However, it did not help much. The economy has been inevitably affected by the global slowdown. The decline in demand for foreign markets and the anxious conservativeness of foreign banks and insurance companies, which also exported it quickly to its subsidiaries in Slovakia, have done their job. Demand for insurance service was influenced by economic depression. A lot of companies cut their insurance expenses. The situation is similar in the household segment. Household demand for insurance services has declined partly due to general hysteria and partly due to lower household incomes. Decrease in this segment was massive and it influenced results of insurance companies. Negativ influence was also from the natural catastrophe. This paper aims to analyze the current situation at the valuation of the insurance companies ( determination of free cash flow).