engleski

Insurance companies as financial intermediaries

Financial intermediaries buy direct claims with one set of characteristics and transform them into those with different sets of characteristics. This procedure, called financial transformation, converts size, liquidity, and risk of collected funds, and consequently decreases financial costs. Traditional theories of financial intermediation were developed when the role of intermediaries was only to collect funds and channel them to companies, that is, to solve the problem of transaction costs and asymmetric information. However, the role and importance of financial intermediaries have increased with the development of new financial products and increasing investment possibilities. These changes caused the need for developing modern financial intermediation theory, where the primary role of financial intermediaries is to manage risks and optimize yield. Although depository institutions, i.e. commercial banks, dominate financial markets, the significance of other intermediaries should not be neglected. This paper demonstrates the importance of one group of financial intermediaries, i.e. contractual savings institutions, which collect funds by offering financial contracts aimed at protecting a saver against different risks. Special emphasis is put on insurance companies and their position in the financial system of the Republic of Croatia. This paper gives an overview of the insurance industry in the Republic of Croatia in the period 2008-2018 ; the number of companies, the structure of insurance policies, and insurance gross premiums written. Insurers’ contribution as financial intermediaries was analyzed ; both in Europe and in Croatia, and valid conclusions were given.

financial system, financial intermediaries, insurance companies, Croatia

nije evidentirano