Expansion of Insurance Business: Theoretical Aspects and Assumptions of Market Development

The nowadays insurance, although still having its own essential purpose, has a lot of differences in comparison with the predecessors, which have been mostly determined by the change in technologies, insurer`s demands and assurer`s opportunities. Purposes of this article is to review and highlight such problems, typical of the insurance market, as asymmetric information, adverse selection, conditional commissions, development level of insurance market, the main measures, defining the state of insurance, significance of intermediators in the process of selling. One of the ways of problems solution is versions of insurance products, when there may be reached at least partial resolution of risk, by suggesting fewer compensations or incomplete repayments. Conditional commissions for independent intermediators may facilitate the entrance of new assurers into the market, because they create favourable impacts of incentive, which help to overcome unwillingness to collaborate with a new market participant because of non-existing work relationship. Moreover, the system of compensation, motivated both by a bonus and profitability, based on commissions, induce to transmit reliable information for an insurer about customers, otherwise it would have a negative impact on conditional commissions. Solvency II will have impact not only on assurers, but, on the whole economy of the country. One of the expected results is the increase of an insurer's protection and improvement at understanding of insurance services. This would reduce problems of asymmetric information, because an insurer would not only dispose of the bigger information amount, but would also be more induced to reveal information for insurers, which is essential in order to offer an appropriate insurance policy, after a better perception of insurance particularity. Tasks of the research – to establish features of insurance market of the current period; to provide prognosis of its development; to anticipate application opportunities of a theoretical research model. There will also be an attempt to discuss not only specific, but also other phenomena, typical of other markets, such as competition or concentration. Methods of the research: after foreign scientific literature has been analysed, there are provided theoretical aspects of insurance market development and a represented-representative theory model in insurance, on the basis of which the research has been done and the current situation of insurance market has been evaluated