INSURANCE COMPANIES’ FINANCIAL INTERMEDIATION
INSURANCE COMPANIES’ FINANCIAL INTERMEDIATION

Summary/Abstract: Due to the transformation of the social-economic system and the afrmation of the capital market in countries that are currently in transition, including those countries in the Balkan region, the issues of the concept, role, importance, method of functioning, efcient portfolio management, and efcient management of institutional investors are gaining signifcance and increased attention. Insurance companies are contributing to the process of privatization and development of the market economy, as well as to efcient capital allocation, and this is especially important for countries lacking money and capital, which is precisely the case with the economies of the countries in the region. Te goal of this research is to examine the role of the insurance companies as mobilizers of savings and of investors, as well as to explore the function of these saving methods in achieving economic development. Te paper shall describe the structure of the fnancial system, the role played by insurance companies, the process of institutionalized fnancial saving, the importance of insurance companies in fnancial intermediation, the measuring of returns and risks of investments of insurance companies, and the costs of the investment risk of the insurer, as well as comment on the importance and characteristics of institutional investing.

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