Insurance Sector Development and its Effect on the Financial Markets in Developing Countries: The Case of Kosovo

Abstract

The purpose of this paper is to extract the important factors in the nature of insurance companies and their direct role in the economic and financial system development. This market study aims to analyse the insurance system in Kosovo by determining and then analysing its structure, the degree of concentration of insurance companies on the insurance market, their behaviour towards price, number of participants, companies operating in this market and types of products and services they provide. Our analysis are gathered on statistical and qualitative data through the study of the theories on insurance market development in other countries. Furthermore, for the empirical analysis, we used secondary data from Central Bank of Kosovo, Insurance Companies and Association Insurance of Kosovo. Also, we conducted two surveys. First, we conducted a survey with finance managers from all insurance companies and secondary survey was in general, for people who work. This way we tried to get a better understanding of the issue at hand. The identification of these factors would enable insurance companies to design policies that tackle the demands of consumers for voluntary insurance policies and at the same time to contribute to financial stability of Kosovo’s economy. At the end we have to come out with conclusions on the main research question: Does Insurance Development affect the Financial Markets in developing countries? The expected outcome is that the insurance sector in Kosovo is an important factor for the further development of the financial system.

Effect of Pension and Insurance Funds on Financial Deepening in Nigeria

“…This means that pension funds in Nigeria stimulate the depth of the financial sector in Nigeria. The study also found that insurance funds do not have a significant effect on financial deepening, which is not in tandem with the findings of Baruti (2020). This implies that the increase or decrease in insurance funds will not affect the depth of the financial sector.…”

“…Lastly, further work needs to be done by the Nigerian Exchange Group to list companies. Baruti (2020) examined insurance sector development and its effect on the financial markets in Developing Countries: The case of Kosovo. The market study aimed to analyse the insurance system in Kosovo by determining and then analyzing its structure, the degree of concentration of insurance companies on the insurance market, their behaviour towards price, the number of participants, companies operating in this market and types of products and services they provide.…”

“…Cosmas and Okeke (2016) examined the influence of the contributory pension scheme on the financial system development in Nigeria. Baruti (2020) examined insurance sector development and its effect on the financial markets in Developing Countries: The case of Kosovo. However, none of the studies mentioned above examined the effect of pension and insurance funds on financial deepening in Nigeria.…”

“…However, none of the studies mentioned above examined the effect of pension and insurance funds on financial deepening in Nigeria. Also, none of Shouji and Jiye (2014); Cosmas and Okeke (2016); and Baruti (2020) looked at the depth of the financial system alone. Shouji and Jiye (2014), and Baruti (2020) are not on Nigeria's economy.…”

“…Also, none of Shouji and Jiye (2014); Cosmas and Okeke (2016); and Baruti (2020) looked at the depth of the financial system alone. Shouji and Jiye (2014), and Baruti (2020) are not on Nigeria's economy. While Cosmas and Okeke (2016) which is on the Nigerian economy only used primary data for its analysis.…”