The insurance market in the USA
The USA has widely developed system of property and personal insurance
. The private sector of economy and high level of life of the American citizens cause traditionally a great demand on all kinds of insurance services in this country. It is considered that insurance is not only a part of economy of the USA; the insurance policy - a necessary condition of realization of the American dream.
Insurance motor transportation and aviacivil responsibility became an absolute must for citizens, as the car the most widespread (sometimes the only thing) means of transportation. Steady functioning of insurance industry is provided with system of its adjustment and is a question of calmness of the nation and it Securities before various risk factors.
Insurance - the most influential financial institution of the USA - mentions almost all aspects of an everyday life of the American society and consequently takes a unique place in economic system of the country. Unlike others Financial institutions in the field of insurance of the USA have refused speeding up of federal system of adjustment, having fixed corresponding powers to separate states. Such model of adjustment remains without change in 60-70-80- and the next years. At level of states it was generated a considerable infrastructure of adjustment Insurance industry which throughout all history (about 150 years) has proved the viability and efficiency.
Insurance - an important part of economic system any industrially a developed country, therefore provision of normal operating conditions of the market concerns important national priorities. Scales of the market of private insurance depends on in what measure the state performs social protection of the citizens. In the USA the private insurance sector gives the types of service replacing the state social programs or supplementing them. The market of insurance services in the USA represents two markets - life insurance and other kinds of insurance. Other kinds are an insurance Property, responsibility, from accidents etc. Such division is caused by economic features of various kinds of insurance activity.
Accordingly differ and demands made by adjustment to liquidation of resources, investment directions etc. the USA the leader on volumes of insurance of property and responsibility - 46 % of the world market. Financial assets of the American insurance companies on property and to other kinds of insurance have constituted in 1993 637 billion US dollars. The American insurance market highly competitive - in the country function about 4 thousand companies on life insurance and 4,5 thousand on property and responsibility insurance.
Basically it is the small insurance companies registered only in one staff. But even the large insurance companies registered in the majority of states and operating at national level, have only a few percent of the market on each of kinds of insurance and can't influence the prices. The competition substantially speaks the American insurance market the state approach to adjustment of this industry. The American state considers a competition as the major mechanism, allowing to provide high level of the offer and quality of insurance services. Criterion of access on the insurance market in the majority of states are requirements to the capital. The competition is connected also with growing penetration on the American insurance market of foreign insurers.
The insurance industry - the life insurance market tests competitive pressure from financial institutions - banks and other monetary institutions offering investment decisions, competing to some kinds of insurance services. The competition can amplify, if on the insurance market banks are admitted. American The legislation limits carrying out by banks of adjacent operations.
The market of property insurance also tests considerable competitive pressure. High interest rates, characteristic for 80th have made short-range investments very profitable and have involved in this industry many the new companies that has led to pricing war.
All companies have been forced to reduce the prices to remain in the insurance market. In some years when the insurance companies had to perform payments under the concluded contracts, the investment income couldn't block the half-received awards, and in this market insurance services have essentially risen in price. That consumers couldn't To acquire a required insurance covering on moderate price considerable development have received alternative methods of financing of these kinds of risks, for example, a self insurance, i.e. refuse insurance policy acquisition. Others considerably raise the sizes of deduction with a view of decrease in paid awards.
Creation of the affiliated insurance companies, engaged in insurance of risks or several parent companies became one more mechanism. Adjustment of insurance industry is directed on consumer protection and industries from insolvency of the insurance companies and on provision of availability of insurance to all to whom insurance services are required and to have possibility of their reception at the reasonable prices, on fair conditions without dependence from a residence, a nationality and other factors. In state regulation it is possible to allocate following two Directions: adjustment of ability to meet payments of insurers and market adjustment. Ability to meet payments adjustment includes requirements to the capital, reserve funds, investments, and also grantings of the financial reporting and a measure against the insolvent insurer.
The state gives the basic attention to price fixation, organization of forms of insurance poles, the conclusion of contracts of insurance and consideration of claims. Financial and not financial aspects of adjustment are closely interconnected: adjustment of activity of insurers is inevitably reflected in their financial condition (position) and influences the prices and the services offered by the insurance companies. For an optimum mode of adjustment from the state coordination of actions in both directions that gives considerable difficulties - the adjustment purposes can contradict each other. The ability to meet payments adjustment will be more rigid, the more it will influence offer and price volumes: insurers will be forced to reduce rendered insurance services and to raise insurance installments. Many consumers in such situation can't receive access to insurance at the acceptable price.
Heavy prices are not a guarantee of solvency of the insurer, but also low or more attractive conditions can be offered by the insurance companies which perform more risky operations. In this case the risk of insolvency for them will be above, than for others insurance the companies, establishing more heavy prices and preferring more conservative investment strategy. The decision making, what purposes of adjustment are most important for provision of public concerns, is extremely actual for adjustment of insurance industry.
Insurance industry, performing insurance of risks and investing considerable means, considerably influences development of the whole regions and reflects the countries and consequently is active force of the American society. The American state as it was marked above, has no federal system of adjustment of insurance industry. States in this sphere performed regulating activity in this sphere. The congress of the USA plays a role of the observer. Each staff performs the control in the territory, and the federal antitrust acts concern insurance in that measure in which this type of activity isn't covered by regular adjustment.
The legislation of states assigns powers on adjustment of insurance activity to special bodies. In the majority of states they directly submit to the governor and actually are the ministries, headed by the commissioner appointed to this post. Only in some states these divisions are headed by the elective person, and they don't submit to the governor.
The insurance market in the USA
By: Andrew Andreeff
Holiday Insurance: Safety While on Holidays!! How To Choose Best Wedding Gown For Any Ideal Bride The Many Different Levels Of Extended Warranty Coverage What To Look For When Purchasing Chauffeur Insurance Temporal Insurance Ten Great Causes To Personal A Santa Suit Using Local Coverage When Overseas How To Get The Best Price For Your Insurance Policy Proximate Cause - Insured And Excepted Perils Motorbike Insurance Is For Both Off Road And Street Motorcycles Laws Regarding California Bus Insurance Different Types Of Insurance Sold Online The Hugely Populated County Of West Yorkshire Is Good For Adult Dating