engleski

Contemporary significance of insurance companies in transition economies

Insurance companies together with banks are traditional financial institutions. Usually they represent more than 2/3 of financial sector asset. Their importance recently decreases as a consequence of deregulation of financial system, disintermediation, internationalization and liberalization, globalization and M&A of the financial institutions. Completely new institutions appear and rapidly take part of the market share from the insurance companies and banks. The new competition and modern changes in financial systems in developed countries emphasize the need for a change of insurance companies’ business policy and market strategy. These changes can be seen in the development of new insurance-investment products, new ways of taking over and transferring risk and giving additional financial and insurance services. This paper analyzes modern phenomena and trends in the financial system and insurance business and their effect on the insurance companies in transition countries. The comparison with the insurance sectors in developed countries points to a necessary need for redefining business and business policy of the insurance companies in transition countries, if they want to survive on the highly competitive financial services market of the European Union.

insurance companies; developed countries; transition countries; contemporary significance

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