Participants of the insurance market
Davtyan Levon IFF18-1
The insurance market is part of the fin. market, where the purchase and
sale of insurance protection(products) and the formation of the demand
and supply for these products. It is logical that in insurance market we have
a participants. They are as individual as legal entities which are involved in
controlling, protection, regulation insurance market.
Main participants of insurance market:
-Insurant is a legal entity or a capable individual person who has entered
into an insurance contract with the insurer.
-Beneficiaries. This is the person in whose favor the insurance agreement
is concluded. When it comes to life insurance, the recipient of the insurance
premium is always a third party who will be reimbursed for compensation
in the event of the death of the insured. When concluding an insurance
contract for property that is pledged, the beneficiary is appointed the one
who acts as the mortgagee(залогодержатель).
-Insurance organization. They are legal entities that provide insurance
services. It is they who carry out the formation of monetary funds and their
redistribution(Alpha Life Insurance, VTB Insurance, SOGAZ), including
reinsurance organizations
-Mutual insurance societies. They are associations of individuals and
legal entities that carry out mutual protection of their interests The main
feature of the organization structure is the absolute democracy of
management, which is carried out by its direct members.
-Insurance agents. Domestic legal entities or individuals employed under
GPC(гражданско-правового характера ГПХ) contracts that represent the
interests of the organization and act on its behalf. This is the one who helps
a person to protect themselves from possible harm.
-Insurance brokers. Organizations and individual entrepreneurs that are
intermediaries between the buyer and the seller, who act on their own
behalf, but in the interests of the insurer.
-Insurance actuaries. Persons with a qualification certificate who
calculate tariffs, the volume of reserves, assess the risks and profitability of
investments, they can evaluate the investment project, as well as other
calculations related to voluntary or compulsory insurance.
-The Bank of Russia, which carries out the functions of regulation, control
and supervision in the field of insurance activities
-Specialized depository - a participant in the securities market that carries
out depository activities, Its main purpose is to store certificates of shares
and other securities and keep records of the transfer of rights to them when
making transactions.
What is the difference between accumulative insurance and investment
insurance? Why is there a decline in demand for investment life insurance?
What are the trends in the development of the insurance market in recent
years?
Accumulative life insurance - The insurance policy includes two
components: protective and accumulative, contributions can be paid in
installments, accumulating for an important financial target. Moreover, the
first installment in case of critical events with the life and health of a
person the full amount which he wants to save.
Investment life insurance is an investment vehicle through which the
policyholder invests in securities. Thus, the policyholder becomes a
member of the stock market.
The main difference of these two insurances investment life insurance is
more oriented on increasing funds however the accumulative one is more
for accumulating it(saving).
Advantages of accumulative life insurance
annual tax benefits and deductions: all invested money is returned to the
policyholder at the end of the term in full; household insurance against
accidents and death; the ability to appoint the beneficiary yourself, legal
protection of financial investments.
Disadvantages:
strict obligation to pay contributions; it is impossible to reduce the agreed
amount of contributions if the policyholder becomes insolvent; penalties
for late payments; a missed payment may cause termination of the contract,
the funds paid earlier remain with the insurance company; it is impossible
to terminate the policy without material losses; long term of the contract during this period of time the insurance company may go bankrupt and
disappear
Advantages of investment insurance
Potentially high financial profit; the ability to control the movement of
their financials - the profitability of the insurance organization is
transparent for the client;
Disadvantages
ineffective strategy for managing your investments, income may be absent
or minimal; B premature termination of the contract leads to significant
financial losses; additional costs in the form of bank fees for some
operations;
From my point of view, the main reason of decrease investment life
insurance is that the recent years the insurance premiums was decreased
and there is decline of attractiveness. Moreover, It is mostly connected
with the expired maturity of life insurance investments agreement. The
dividends paid was decreased up to 1%.
Insurance market overview in 2019
The downward trend in the number of participants in the insurance market
continued, The change in the business format affected primarily medical
insurers, The consolidation process is also underway in relation to
universal companies
The share of insurance premiums in GDP decreased from about 1.5 % to
1.3%, 11 insurers left the market due to regulatory sanctions, the rest - on
their own initiative. However the insurance contribution in 2019 seems to
be significantly was decreased.