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DUNAV OSIGURANJE

WIENER STADTISCHE

2-2016

Basic characteristics and determinants of demand for insurance services

Key words: demand for insurance, determinants of demand, demand by groups of insureds, demand by lines of insurance

The findings presented in this paper lead us to a conclusion that the demand for insurance is a very complex economic category. It is determined by a size of a certain social need, the need for insurance cover. Buyers of insurance satisfy that need on the insurance market. The structure and the volume of demand for insurance policies are determined by a number of factors which are commonly very different.
On the side of demand there is a lot of subjects that are different measured by their size, internal organisation and solvency – large, small or medium-sized enterprises, government institutions, handicraft businesses, various associations, households, individuals and the like. From the viewpoint of external characteristics demanders for insurance differ very much. There are differences from the standpoint of their internal characteristics, too. The internal characteristics are especially observable when individuals and families are concerned whose demand for insurance services is determined by a numerous psychological, personal, social and cultural factors.
Just because of the differences stated, demand should be analysed by groups of demanders, where the most acceptable is the division on companies, then on households and individuals, while all other persons should come into the third group. In a sense, the same is being done by insurance companies which classify insureds into different categories, taking into consideration the differences among them.
    Likewise, the research of demand should be also conducted from the viewpoint of differences by the lines of insurance. In majority of countries, including this country, insurance business is divided into life business and non-life business. Some factors influence more the demand for life, others for non-life insurance. In some cases it is not possible to strictly confine causes of the demand for various groups of insurance businesses. Namely, factors such as income, prices or educational level of the population affect approximately the same the demand on the side of life and non-life business alike.
Demand ought to be considered bearing in mind the unity it makes with supply, because these two categories, taken into account together, define the situation on a specific market. If we consider the situation in the Serbian insurance industry, or in other countries at the similar extent of development, the demand is the limitation factor of greater development of insurance market, because there are satisfactory impulses on the side of supply.

Nebojša Žarković

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