Development of the Life Insurance Market in Kosovo

Abstract

The Kosovo Insurance Market has experienced a relatively positive development over the last decade and has been characterized by ongoing reforms, especially with the new companies by off ering new services. Currently, there are twelve insurance companies operating on the market off ering a variety of products. The supervisory and regulatory institution, the Central Bank of Kosovo, approves the licensing and supervision of insurance companies in the country, based on two laws: 04/L - 018 Law on Compulsory Motor Liability Insurances and 05/L - 045 Law on Insurances. From the research conducted by the Insurance Association of Kosovo, it has come to the conclusion that both forms of insurance are developed: life insurance and non-life insurance, with the latt er dominating the market. The insurance market in Kosovo today is quite consolidated and has suffi cient fi nancial and professional capacities to provide various insurance coverage to protect citizens and their businesses from diff erent events whether they are natural disasters or insurance on health, life, property, responsibilities, various accidents etc. However, it should be noted that there are still challenges ahead to overcome and achieve even more qualitative services, further enhancement of security off ers and contemporary products, methods and ways forward of management to achieve European standards. Through this study we have come out with exploration to see which factors are aff ecting Kosovo’s demand for life insurance and how insurance companies can design policies that address the demands of costumers for life insurance policies? Therefore, we have considered a brief history of the development of the insurance market, the progress of this market during the last decade, especially in voluntary insurance products such as life insurance. Our analysis is gathered on statistical and qualitative data through the study of the theories on life insurance development in other countries. Further, for the empirical analysis, we have used secondary data from Center Bank of Kosovo, Insurance Companies and Association Insurance of Kosovo. Also, we have conducted an interview with a manager of sell and marketing department from insurance company Illyria Life, to try and get a bett er understanding of the issue at hand. The identifi cation of these factors would enable insurance companies to design policies that tackle the demands of consumers for life insurance policies.