The Role of Reinsurance on the Croatian Insurance Market

Reinsurance is an integral part of the insurance market and plays the vital role regarding the financial stability of the global insurance markets. The authors in this paper are investigating the dynamics of premium ceded to reinsurance in the Republic of Croatia in the 2002-2012 period. In total observed period, the share of premium ceded to reinsurance is quite stable ranging between 9.82% and 11.63%. Moreover, the analysis reveals that the share of premium ceded to reinsurance is substantially higher in non-life insurance than in life insurance segment which in 2012 accounted for 14.32% and 3.70% respectively. Furthermore, as the purpose of reinsurance is to provide cedants with lower claims costs, the paper shows the share of reinsurance in settled claims throughout the observed period. The authors also describe the legal system in the Republic of Croatia regulating the reinsurance activities which is completely transposed form acquis communautaire.