KEY FACTORS LEADING TO HIGH MTPL INSURANCE CONCENTRATION IN ALBANIA AND SUGGESTIONS FOR CHANGE
Journal Title: Knowledge International Journal - Year 2018, Vol 26, Issue 1
Abstract
The insurance market in Albania is notably underdeveloped compared to the Western European countries. As this is also the case for most other Western Balkan countries, it is a phenomenon that leads to a high concentration of compulsory insurance products, compared to voluntary ones. The most common compulsory product is MTPL insurance, which takes up the overwhelming share of the insurance portfolios for the Western Balkan countries; however, this fact seems to appear rather more pronounced for the Albanian market for various reasons, the most relevant of which this paper means to delineate. As the high concentration of MTPL insurance has been a persisting issue in Albania during the last decade, as well as in several neighbor countries, the nature of these markets remains underexploited, which is a clear sign that there is potential for growth and room for existing and new voluntary insurance products to thrive. A meek indicator that attests to the underdeveloped nature of the insurance market in Albania, is the low number of the companies trading life insurance and their meager market share, compared to the companies trading non-life insurance. Aside from a slowly developing economy, remarkably low market penetration and GWP-to-GDP ratios are direct indicators of an undersized insurance market in Albania. As the insurance companies might have lost incentive and feel comfortable with the current state of the Albanian market, the Government and the Supervisory Authority would have to take it upon themselves to create incentives for the public, in order to enhance the development of the insurance market. Encouraging the public awareness of insurance, tax-relief and establishing consumer trust in insurance market, would certainly be expected to lead to increased popularity of and interest in voluntary insurance products among the public. In this way, not only is the imbalance on the insurance concentration counteracted as a result, but less financial burden is placed on the consumers in general and even the Government, in case of adverse occurrences. For one thing, insurance should not be perceived as an obligation stipulated by law or as business that benefits only the insurers, but it should primarily be regarded as a need or necessity that provides protection against perils, offering peace of mind to the insured, while preserving their financial stability, should any incidence take place. For this, reason, the paper also intends to provide valid suggestions on how to tackle the main underlying factors contributing to high MTPL insurance concentration in Albania. Ideally, this would be achieved through effective involvement of the Government and the Supervisory Authority, striving to promote a positive change in the insurance market. Given the similar reality the insurance markets in the Western Balkan share in common, these suggestions may also be regarded as beneficial by other countries in the region, suffering the same condition.
Authors and Affiliations
Ervin Koçi
Keywords
Related Articles
- EP ID EP50069
- DOI -
- Views 305
- Downloads 0
INDUCTION INTO THE TEACHING PROFESSION FROM THE POINT OF VIEW OF BEGINNING TEACHERS
This paper contains the results of a study on the beginning teachers’ attitudes and expectations regarding their induction into the teaching profession. The study was conducted in 2018 within "The Art of Mentoring the Tr...
TEACHING ENGLISH IN A MULTICULTURAL CLASSROOM
This paper will be concerned with multiculturalism in English language teaching as an important component in education. Multicultural education as an idea has a major goal to reform the educational institutions in order...
A STRATEGIC FRAMEWORK FOR THE DEVELOPMENT OF SOCIAL ENTREPRENEURSHIP IN BULGARIA
The social policy of a country is a set of specific activities aimed at regulating the social relations between different in their social status subjects. This approach to clarifying social policy is also called function...
WHAT ARE THE RESPONSIBILITIES OF BEING AN UNIVERSITY TEACHER
Numerous European countries show a state of increasing in the number of academic staff in higher education. One of the reasons for this increase is in fact the increase in the number of students in higher education. Neve...
PRECONDITONS FOR SUCCESSFUL MENTORING IN THE COURSE OF TRAINING TEACHERS AND INTRODUCING THEM TO THE PROFESSION
The beginning teacher’s transition from the university to the educational institution is a complex and dynamic process. In the time of generational change, expectations concerning this activity are burdened with high pub...