Insurance Industry: Are we Heading The EU for an Ideal Single Financial Services

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Insurance Industry: Are we Heading The EU for an Ideal Single Financial Services Market? Matthias Müller-Reichart Martin-Luther-Stra ße 2, 97204 Höchberg, Gemany E-mail: m.mueller-reichart@t-online.de 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 Europearn 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 GDIP 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 Chair of Risk Management, University of Applied Sciences, Wiesbaden Assistants: F. Chalkiadakis; S. Nagel; A. Skegro (Tutors of the Above Chair).

Explanation / Answer

The benefits of a single European insurance market

With the making of the European Single Market for protection benefits, the European Union seeks after the goal to encourage the entrance to these administrations in other Member States for purchasers and to permit insurance agencies to open new conveyance markets for their items.

Single Market measures have produced full results however there are clear indications of critical change in the European economy. We now have proof of the accompanying positive, but preparatory impacts of the Single Market in setting off the normal support of mix, rivalry, financial execution and advantages for purchasers:

1. Growing rivalry between organizations in both assembling and administrations;

2. A quickened pace of modern rebuilding, with the resultant advantages as far as more noteworthy intensity;

4. A more extensive scope of items and administrations accessible to open division, mechanical and local

5. purchasers at bring down costs, especially in recently changed administration areas, for example, transport, financial administrations, media communications and broadcasting;

6. Quicker and less expensive cross-boondocks conveyances coming about because of the nonappearance of outskirt controls on merchandise;

7. More noteworthy versatility between Member States for the two specialists and those not financially dynamic.

These benefits have been gained without any reduction in safety standards for consumers or workers.

In many areas standards of protection for the citizen have in fact increased. Citizens of the Union also enjoy more personal freedom and have more choice than ever before.

The Single Market has prompted a vital increment in exchange and in the EU's offer of outside direct speculation at world level. Nonetheless, the expansion in exchange among Member States has not been to the detriment of exchange with third nations. Moreover, a relative meeting of Member States' generation structures can be perceived because of spend significant time in similar divisions however extraordinary value quality specialties, an advancement which facilitates the procedure of Monetary Union.

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