Saturday 9 February 2013

What is Insurance market

The insurance market is an integral part of the market economy. The concept of the insurance market is considered in two aspects. First, the insurance market is a special economic area of ​​monetary relations, where the object of sale is a special commodity - insurance protection (insurance services) and which formed the supply and demand for it. The market provides an organic relationship between the insurer and the insured. Secondly, the insurance market is a complex integrated system of insurance and reinsurance companies (insurers), to carry out insurance activities.

Thus, the insurance market - a set of economic relations, which are formed in the process of supply and demand for insurance services and is the act of buying and selling. The functioning of the insurance market is subject to the law of value and the law of supply and demand. The objective basis for the formation and development of the insurance market is the presence of the public and the need for insurance protection, capable of providing continuity of the reproduction process through compensation and cash assistance to victims of unforeseen extraordinary events. The second condition for the development of the insurance market is the availability of a sufficient number of independent insurance companies that can meet all the needs of society in a variety of insurance protection.

Thus, participants in the insurance relations in the insurance market are the insurers (insurance companies) that sell insurance, and insurers (natural and legal persons) who need insurance protection. In a market increases the interest of potential policyholders in insurance risks associated with the expansion of available property rights with increasing responsibilities of employers and employees to employers, as well as the risks associated with providing financial guarantees for the job losses, bankruptcies, banks, etc. .

As intermediaries between sellers of insurance services are the insurance agents and insurance brokers, whose activities contribute to the expansion and development of the insurance relationship.

Specific product in the insurance market is the insurance services, composition and structure to market conditions significantly expanded.

Insurance market, depending on the size of the supply and demand for insurance services can be divided into internal, external and international.

Internal insurance market develops in a particular region, where the need for insurance services to meet specified insurers carrying out their activities in the area.

External insurance market - a market that is outside of the domestic market, interconnected with policyholders and insurers of the area.

International insurance market reflects the insurance and reinsurance in the global economy.

State may participate in insurance relations through state insurance companies and has a regulating effect on the functioning of the insurance market by various regulations and legislation, complementing the market mechanism of insurance.