Overall influence of Solvency II on Latvian insurance market changes
2016
Lahiza, A., University of Latvia, Riga (Latvia)
The purpose of the article is to analyse the positive and negative overall performance for the last seven years of the Latvian insurance market (changes of premium amount, losses amount, loss ratios etc.), as well as the operation of insurance companies as such (companies amount increasing/shrinking, or consolidation/merger, and bankruptcy) from the perspective of the Solvency II preparation and implementation process. Taking into account that 70% of the premium insurance companies are gaining from the Non-life insurance (examples: Motor Own Damage – MOD (or KASKO), Motor Third Party Liability – MTPL (or OCTA), Property etc.) the study will be oriented only on the Non-life insurance industry. The task of the article is to identify in what sense the Solvency II implementation process has influenced overall changes in the Latvian insurance market, what has taken place during last 5 years. Taking into account that the insurance industry has an effect on the Latvian economy; the study gives the possibility to evaluate if Solvency II implementation had a significant impact, or it was only one part of the factors of influence in the economy. In this article the quantitative research method is used, the available Latvian insurance market statistics, as well as Insurance companies’ balance sheets are analysed. During the research process will be analysed positive and negative changes in the Latvian insurance market, as well as the Solvency II implementation process level of impact on these changes.
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