Albanian Insurance Market Analyses and their Business Model

The insurance market in Albania has been started to operate in the last years of centralized socialist system. It was represented by state insurance Company INSIG. It was the first important segment of the financial market to develop faster once Albania entered into the free market economy model on the last decade of the past century. It is the largest and most advanced market in non-banking financial sector. Together with investment funds, pension funds securities markets those are under the supervision of Albanian Financial Supervision Authority, not Central Bank. The insurance market, has had a lot development and positive growth in terms of wide range of products offer and the geographically expansion all over the country and in some neighboring countries in the Balkan region where Albanian population live. This potential is based on the favorable economic conditions, improved regulatory and supervisory system, low market penetration rate, as well as, on business community and population, which are dynamic and easily adaptable. The Insurance Industry has been undergoing dramatic changes during the last ten years. This industry can help the business companies and other entities on having economic and financial support, mitigating their risks and losses as well from natural disasters or other uncertainties. This sector can give a good support on social development and financial contribution on economy by reducing the risk of future losses. There are a lot of empirical research based on financial analyses of Albanian Insurance Companies in which you can see a causal relationship between insurance sector effects in economic growth by bearing risk on business investment. The study of qualitative and quantitative information on Main Insurance Company in Albania, their business model and risk drivers shows the development stage and challenges and steps needs to be in line with EU directives. Incorporation of international best practices combined with an efficient regulatory and supervisory approach will certainly play a very big role in the non-banking financial market development and growth.