The EU Insurance Industry: Are we Heading for an Ideal Single Financial Services Market?
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The EU Insurance Industry: Are we Heading for an Ideal Single Financial Services Market? Matthias Mu¨ller-Reichart* Martin-Luther-Strae 2, 97204 Ho¨chberg, Germany. E-mail: [email protected]
The expert group ‘‘Insurance and Pensions’’ discussed the state-of-the-art of the (EU) insurance market with members of the European Commission and carried out a controlled review of the single market regulation that has been achieved or is being strived for in the future. The article now stresses the gaps between the intended and the actual situation in a critical but constructive way and points out what still needs to be done. The statements of the expert group ascertain that the process of developing a single financial services market in the EU has become entangled in the net of the many regulations issued by the European Commission. These regulations are impeding the productive implementation of the single market in all 25 EU Member States and making it quite difficult to achieve the aim of the most successful single financial services market in the world. The Geneva Papers (2005) 30, 285–295. doi:10.1057/palgrave.gpp.2510027 Keywords: Financial Services Action Plan; FSAP; single financial services market in the EU; european regulations; insurance and pension market; european directives
The European Union insurance market on the path to excellence On 1 May 2004, the European Union (EU) enlarged its sphere of action and influence by another 10 countries. This eastward enlargement has given it added momentum for growth and development. Over 100 million consumers represent a substantial added consumer base now able to enjoy the blessings of the global market economy. However, they must also be guarded against the excesses of liberal economic systems. These new markets have a lot of catching up to do, among other things opening up the prospect of growth in the financial services sector (credit services and insurance). The potential for growth becomes obvious when one looks at the discrepancy between the number of consumers and value added. The 10 new EU Member States currently account for 18 per cent of the population of the EU-25 but to date for only 5 per cent of aggregate EU GDP. As for the insurance sector, insurance premiums total 9 per cent of GDP in the older EU Member States but only 3 per cent in the accession countries, clearly signalling that there is scope for substantial growth. Moreover, the new EU Member States account for a mere 3 per cent of aggregate non-life premiums in the EU and 1 per cent of aggregate life insurance premiums. Those figures also point to something of a
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Chair of Risk Management, University of Applied Sciences, Wiesbaden Assistants: F. Chalkiadakis; S. Nagel; A. Skegro (Tutors of the Above Chair).
The Geneva Papers on Risk and Insurance — Issues and Practice
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‘‘growth goldmine’’ for the insurance industry. These are clear signs that the EU insurance industry has a particularly large amount of lost ground to recover in the region, creating ample opportunities for insur
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