2.

INTERNATIONAL
INSURANCE MARKETS
 1. INTERNATIONAL MARKET:
GENERAL CHARACTERISTICS
• Origin - marine insurance
• Intensive development after the II-nd World War because of the
international economic growth
• Structural changes on the national markets (life insurance vs. non-life)
• Globalization of financial services
• New classes of insurance in the last years: e.g. Cyber Insurance
 2. ACTORS OF THE INTERNATIONAL
INSURANCE AND REINSURANCE
MARKETS
• Demand vs. Offer
• Clients vs. Service Providers

• Clients – persons & companies for the risk protection

• Service Providers – specialized companies:
• Insurers & reinsurers
• Intermediation in insurance & reinsurance (agents and brokers)
• Service renders
 2. ACTORS OF THE INTERNATIONAL
INSURANCE AND REINSURANCE
MARKETS

• Direct insurers
• Captive insurers and reinsurers
• Direct reinsurers
• Mutual associations
• Lloyd’s syndicates
• Underwriting Pools (national and regional)
 AGENTS
• represents the interest of insurer
• sell insurance of one or more insurers
• persons working on full-time or part – time
basis for the insurer, represented by a legal
agreement/ contract
• are not professionals, acting on the market as
experts
• can’t be deferred to the Court of Law
unprofessional practice
• remunerated by the insurer on salary or
commission basis, or a combination of them
• limited responsibilities sometimes
BROKERS
• represents the interest of insured/reinsured
• purchase insurance / reinsurance contracts for their
client, called principal
• independent companies, specialized in
intermediating on the insurance & reinsurance market
• are insurance experts
• can be deferred to the Court of Law unprofessional
practice
• remunerated by the insurer on commission basis
(called brokerage)
• complex responsibilities for offering the optimal
protection for their client, to conclude the contract, to
administrate the loss
MOST IMPORTANT FINANCIAL ORGANIZATIONS IN EUROPE
• Allianz • Credit Suisse /
• Lloyds TSB Winterthur
• HSBC • Fortis
• Zurich Fin Service • Swiss Re
• Deutsche Bank
• ING Group
• Soc Gen
• AXA – UAP
• BNP
• Munich Re
• Commerzbank
• Generali
 LIFE INSURANCE
• Main risk covered: death.
• Death is a certain event; the occurrence
moment is not certain.
• Aim: financial protection for the family.
• Risk evaluation (underwriting): at the age
when the contract is signed, regardless of its
modification during the contractual
relationship
• (At least) Three parties involved: the insured,
the insurer and the beneficiary.
• It is not an indemnity contract.
• The insured amount is established based on
the protection need and the financial
possibilities of the insured.
NONLIFE INSURANCE
• Other types of risks insured.
• The occurrence of the insured risk is uncertain,
probable, possible.
• Aim: compensation for material or financial losses,
maintaining the economic situation of the insured.
• Risk evaluation (underwriting): when the contract is
signed, depending on the entire exposure period
• Usually, only two parts; sometimes, there is also a
beneficiary.
• It is an indemnity contract.
• The indemnity can not exceed the value of the good
at the moment in which the risk is produced.
 LIFE INSURANCE NONLIFE INSURANCE
• Medium and long-term contracts (min. 3-5 • Short-term contracts (12 months).
years – 35-40 years).

• Premiums are paid during the whole period of • Premiums are paid during the short period of the
the contract, thus periodically generating
revenues for the insurer. contract.

• The insurer’s portfolio is relatively stable for a • The insurer should permanently find new clients.
long time.

• Mathematical reserves are constituted for • Technical reserves are constituted for paying
creating the life insurance fund of which the
insured amounts are paid. indemnities.

• The risk is relatively constant throughout the period of

• Exposure to risk is decreasing throughout the
period of the contract due to the creation of the contract.
mathematical reserves.

• Reinsurance is concluded for the amount •Reinsurance is concluded for the same amount during
exposed to risk, which is decreasing each year, the whole period of the contract.
due to mathematical reserves.
WORLD LIFE AND NONLIFE INSURANCE
DIRECT PREMIUMS WRITTEN, 2015 ($
BILLIONS)

Source: Insurance Information Institute, 2017 Insurance Fact Book

TOP 10 COUNTRIES BY LIFE AND NONLIFE DIRECT
PREMIUMS WRITTEN, 2015, (US$ MILLIONS)

Source: Insurance Information Institute, 2017 Insurance Fact Book

LEADING COMPANIES
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