Overcoming Past Obstacles to Insurance in the New EU Countries

The newest EU member countries in Central and Eastern Europe went through a rapid transition from state to market direction of economic and financial affairs as well as of enterprises and social arrangements, including insurance. As incentive structures, property rights, rules of competition, and the assignment of liabilities changed, so did the risks associated with private operations and investments. This essay looks at some of the unexpected risk exposures and the means of coping with rapid change in incomplete financial markets largely through the eyes of a leading participant in the process. Keywords: privatization of insurance; incomplete financial markets; transition countries; bancassurance; income security; insurability