The European Union stands for free trade, open market and competition. EU membership creates new possibilities for the insurance market, specifically tranport insurance, in terms of competition and the possibility to offer new products on certain markets. Freedom to provide services allows insurers to reach new clients and provide a type of service which is not available from their local insurers. This puts pressure on the local economy to work on better and new solutions for their clients and increase competitiveness. This way insurers become motivated to invest extra energy and means into development of new products or technology, aimed to appeal to their clients. On the other hand, local insurers can offer services in other EU member states, thus maximising their income and rising up to the challenge. Innovative ideas put into insurance products, combined with modern methods of sale and compensation, enable cross-border expansion.
Market access is regulated by EU legislation, but national laws must also be taken into account, consumer protection laws in particular. Hence insurance provided by foreign insurers tends to be reserved for higher risks connected with legal persons and not so much for individuals. Also, local insurers invest more in local trade, culture and sports, showing more presence in the community as well as social responsibility, whereas something like this is hardly expected from foreign insurers, who often do not even have an office in the country.
Insurance provided in EU member states is diverse, but nonetheless regulated. The type of insurance offered by an insurer depends on market opportunities, products developed as well as the types of potential clients (insureds). In any case, market results, costs of services and cost of doing business are closely monitored.
The opening of the EU market offers the possibility to expand the insurance business, but one has to be aware of national and sometimes even local laws, as they tend to be quite specific. The potential is huge and worth exploring provided that one has an attractive and competitive product.
