Archive of Journal - Financing

Financing – scientific magazine for economy

ISSUE 2021, No. 2, Article 2, Year of publication: 12, June, 2021
Place and role of insurance industry in economic development of Bosnia and Herzegovina

AUTHOR

Željko Šain, PhD*; Jasmina Selimović, PhD**, Edin Taso***

*Full Professor, University of Sarajevo, The School of Economics and Business, Department of Finance
**Assistant Professor, University of Sarajevo, The School of Economics and Business, Department of Finance
***Insurance Supervision Agency of the Federation of BiH

 

ABSTRACT

ARTICLE INFO

Insurance industry and insurance activity have a signifi cant place in the economic development of any country. It is true of Bosnia and Herzegovina as well. There is a mutual correlation of proportionate character between the degree of country’s economic development and the development of the insurance industry and activity. In 2019, insurance premium in the whole world amounted to 6 trillion 292 billion and 600 million USD. Thus, a large amount of money, only based on premium, is a good reason for insurance companies to be considered as some of the greatest institutional investors in the world. Insurance has three basic functions: the function of protection, the function of mobilization and accumulation of financial resources, and the socio-economic (social security) function. Based on the offi cial data, the paper presents comparative indicators of the development of fi nancial markets and fi nancial position of the insurance industry in the world, Balkan region, and Bosnia and Herzegovina. Besides a series of presented data, a particular interest is attached to the ratios of premium per capita to the share in GDP in EU27 and BiH. In 2019, EU27 premium per capita amounted to 2,122 euro, while in BiH it amounted to 112. In the same year, the share of premium in GDP was 6.81% for EU27 and 2.19% for BiH. These indicators are suffi cient evidence of the power of insurance industry in the economic development of Bosnia and Herzegovina. COVID-19 pandemic is a new systematic risk and a big and complex threat. The title of the paper focuses on the impact of the current pandemic on the insurance industry and the economic development. According to Allianz Risk Barometer for (Allianz Global Corporate & Specialty − AGCS) in 2020, the diseased caused by coronavirus is in the very top of global business risks and, at the same time, adversely affects other leading business risks in the world. In this way, it also directly affects the insurance industry and the economic development.

Keywords: insurance industry, risks, economy, finance, socio-economic crisis, Bosnia and Herzegovina

DOI: DOI: 10.7251/FIN2102017S

Corresponding author:
zeljko.sain@efsa.unsa.ba