Ukraine’s European integration has been accompanied by a profound transformation of its financial sector. One of the key areas of reform has been the introduction of risk-based insurance supervision and modern standards of financial regulation.
Zhanna Dryha, doctor of Economic Sciences and professor in the Department of Law, Public Management and Administration at Zhytomyr Polytechnic, combines academic research with practical experience in the insurance sector and financial regulation. She beings a particular focus on insurance reserves, internal control, risk management, and emerging AI-based supervisory tools.
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In an interview with Kyiv Post, she discusses Ukraine’s transition to risk-based insurance supervision, the importance of reliable data and internal controls, and how her research on insurance reserves has evolved into a broader framework for financial regulation and AI governance.
Kyiv Post: You have more than 20 years of professional experience in insurance and financial regulation, and since 2011 your research has focused on insurance regulation, internal control, and risk management. During this time, the financial sector has changed dramatically. In your view, what has become the main challenge for modern financial regulation?
Zhanna Dryha: Over the past 20 years, the financial sector has changed more rapidly than in many previous decades. Digitalization, artificial intelligence, automated financial services, and digital assets have significantly expanded the capabilities of financial institutions while also creating new risks. That is why the key issue today is not simply the adoption of new technologies, but the ability to ensure effective risk management, robust internal controls, and trust in the financial system. These are the issues at the core of my research.
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Today, the Ukrainian insurance market is undergoing one of its most sweeping reforms. What has fundamentally changed, and why are these changes important, not only for Ukraine but also for European integration?
Zhanna Dryha: We are talking about a transition from formal compliance with regulatory requirements to a risk-based model in which insurance reserves are treated as economic obligations that must be appropriately assessed, verified, and backed by assets of sufficient quality. NBU Resolution No. 157 details requirements for insurers’ governance systems, internal control, internal audit, and accounting for insurance contracts. The significance of these changes can be viewed from three perspectives:
The first is political. Ukraine has committed to carrying out institutional reforms, increasing transparency, and implementing modern mechanisms of financial regulation as part of its cooperation with the EU, the World Bank, the International Monetary Fund, and other international partners. The fewer the opportunities for manipulation, the greater the confidence of international financial institutions and investors.
The second is economic. Insurance serves as an essential component of the risk-management infrastructure. If insurance reserves exist only formally and are not backed by high-quality assets, the risk of non-performance is ultimately transferred to policyholders, businesses, and the state, reducing the country’s financial stability and investment attractiveness.
The third is technological. Reliable, verifiable, and traceable data form the foundation of modern financial supervision. Without such data, the digitalization of the financial sector, the automation of control procedures, and the secure integration of artificial intelligence into financial regulation, risk management, and supervisory processes are impossible.
You describe risk-based regulation as a modern supervisory model, yet your research began long before the current reforms – almost 15 years earlier. How did it all start? Did your experience working at UNIQA serve as the starting point for your research?
That’s correct. This research began with my practical work in the insurance sector, where I saw that an insurer’s reliability depends not only on the size of its insurance reserves, but also on the quality of the assets backing them, the effectiveness of internal controls, and coordination among actuaries, finance professionals, and internal auditors. This led me to view insurance reserves not as an isolated accounting issue, but as part of a broader system of risk management and financial stability.
At the time, professional practice lacked comprehensive methodologies for simultaneously assessing asset quality, liquidity, risk concentration, compliance with insurance obligations, and internal control effectiveness. This methodological gap prompted the research program I have developed since 2011 in insurance reserves, risk management, and internal audit.
At what point did this research extend beyond insurance and become the foundation of your academic and teaching activities?
Zhanna Dryha: My research on insurance reserves formed the basis of my PhD dissertation, “Accounting and Internal Control of Transactions Involving Insurance Reserves,” which I defended in 2014 at Kyiv National Economic University (KNEU). As the research progressed, it became clear that insurance reserves were closely linked to risk management, asset quality, internal control, internal audit, and the financial stability of non-bank financial institutions.
I therefore continued this work at Zhytomyr Polytechnic State University, where it was further developed in my doctoral dissertation, “Accounting, Analysis, and Audit of the Activities of Non-Bank Financial Institutions in a Risk Environment.” My university work since 2016 allowed me to transform practical observations into a coherent research program, expand my teaching activities, and establish a distinct research direction integrating accounting, internal control, auditing, risk management, and financial regulation.
Over the years, your research framework has evolved through more than 70 scientific publications, five monographs, and a series of original methodologies. How has this framework developed, and which result do you consider the most significant?
The central result of my academic work has been the development of a comprehensive risk-based framework for accounting, internal control, and internal audit built around the analysis and management of risks associated with insurance reserves. I later expanded this framework by integrating forensic early-warning mechanisms, creating a broader system aimed at strengthening insurers’ financial stability.
This framework has been incorporated into teaching materials for approximately 15 academic disciplines and translated into a series of original methodologies, certain elements of which have been registered as works protected by copyright. It also provides a methodological basis for the safe integration of artificial intelligence and digital assets into the governance, internal control, and financial regulation of non-bank financial institutions.
Many of the ideas you developed appear to have preceded elements of the National Bank of Ukraine’s current risk-based model. To what extent is that the case?
The foundations of this research direction took shape between 2011 and 2014 and formed the basis of my PhD dissertation. Even at that stage, my research developed risk-based approaches to the assessment of insurance reserves, actuarial verification, asset quality, and internal control. These findings were developed and published before the current reform of insurance supervision, and corresponding principles were later reflected in the requirements of the National Bank of Ukraine concerning the assessment of insurance liabilities, the quality and diversification of assets, internal control, and audit.
One practical outcome of this stage was the QLDCR (Quality–Liquidity–Diversification–Counterparty Risk) model, designed for the comprehensive assessment of the quality of assets backing insurance reserves.
Between 2016 and 2021, I continued to develop this research direction as part of my doctoral research. This led to the IAEAS (Internal Audit Effectiveness Assessment System) methodology for assessing the effectiveness of internal audit within a risk-based management system, followed by the FEWS (Forensic Early Warning System) methodology, which integrated accounting, internal control, internal audit, actuarial assessment, forensic analysis, risk management, and prudential supervision to support the early detection of financial manipulation and threats to insurers’ financial stability.
In preparing my Regulatory Note in response to the NBU Discussion Paper on the responsible use of artificial intelligence, I applied my original AI-PRIC (Artificial Intelligence Prudential Risk Integration and Compliance Methodology), which integrates AI into corporate governance, risk management, internal control, internal audit, and prudential compliance. Together with my other methodologies, AI-PRIC has been registered as a work protected by copyright, providing documentary evidence of my authorship.
Your early research focused on insurance reserves, while today you work on AI governance. How did this transition occur?
The transition was a natural extension of the same research framework. My early work examined how reliable data, asset quality, internal controls, and audit mechanisms can identify and mitigate financial risks. As financial institutions became increasingly digital, these same issues extended to automated decision-making and artificial intelligence.
AI-based supervision depends on data discipline – completeness, quality, structure, clear accountability, and audit trails. NBU Resolution No. 157 and related regulatory changes help establish this foundation, enabling tools such as automated detection of anomalies in reserves, concentration monitoring, identification of risk patterns in claims, and continuous auditing. My methodologies demonstrate how regulatory data, internal audit, and early-warning technologies can be integrated into a unified digital supervision framework.
We often talk about drawing on international experience. Could Ukraine’s experience also be relevant to international insurance companies and regulators?
Ukraine provides a relevant case study of how risk-based regulation can be implemented amid heightened uncertainty and rapid institutional change. The methodological approaches I developed for insurance reserves, internal audit, and risk management have been applied in professional settings involving international companies and organizations, including UNIQA, UNIVERSALNA, part of Fairfax Financial Holdings, and BDO, while Chubb has expressed interest in their further development.
These approaches are not limited to a single jurisdiction. They can be adapted by international insurance groups and financial regulators seeking to strengthen financial stability, transparency, and the reliability of controls. Ukraine’s ongoing regulatory reform therefore offers not only practical experience but also solutions that may be transferable across jurisdictions.
If we were to look back on your work 10 years from now, what would you like to see as your main legacy – academic publications, trained professionals, or practical changes to insurance supervision?
I would not separate these outcomes. For me, scholarly impact occurs when an idea moves beyond a publication, is applied in practice, developed through further research, and carried forward by other specialists. That is how a lasting research tradition develops.
Together with international colleagues, we founded GIDAFS (Global Institute for Digital Assets, Financial Security, and Public Governance), bringing together scholars and practitioners from the United States, the United Kingdom, Europe, and Ukraine in financial security, financial regulation, internal audit, risk management, digital assets, and AI governance.
In 2026, at the International Consortium on Governmental Financial Management (ICGFM) conference in the United States, I presented my approach to managing AI risks in financial monitoring. I subsequently further developed this work in expert recommendations submitted to the National Bank of Ukraine in response to its discussion paper on the responsible use of artificial intelligence in the financial market.
These areas share one objective: protecting the financial security of users of financial services. I believe individual financial security contributes to the stability of financial institutions and, ultimately, national financial security. In 10 years, I would like to see my research-based solutions applied in practice and further developed by other specialists to strengthen financial security and the resilience of the financial system.
