THE IMPORTANCE OF THE APPLICATION OF ECONOMIC PRINCIPLES IN INSURANCE

Abstract

Insurance companies are exposed to a number of risks. They financially compensate the damages by indirectly protecting the insured from the realization of risks. The whole process is based on economic principles in accordance with which insurance premiums and fees must correspond to accepted risks, while maintaining compliance with regulatory requirements, maintaining the trust of policyholders and other stakeholders. The aim of this paper is to provide an overview of the most important economic principles that insurance and reinsurance companies must apply if they want to survive and develop, to maintain the trust of policyholders, the state, reinsurers and other stakeholders.