Published December 24, 2022 | Version v1
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  • 1. Faculty of tourism and hospitality – Ohrid, UKLO Bitola


The paper brings together the two key challenges of modern insurance – microinsurance products and catastrophic risks; and having in mind Insurance principles, attempts to put Risk Management function between its social and economic dimension. In order to answer to the main question “Whether insurance is a luxury or a necessity?” besides the economical, also sociological, psychological, cultural, and financial factors have to be included, such as: legal framework regulating the insurance market (compulsory and optional insurance); the level of awareness for the need of buying insurance services (because it is usually about types of risks that the frequency of occurrence is not extremely expressed); and the level of living standard, or the availability of insurance services for socially vulnerable categories of the population in a specific economy environment.

The paper refers to the analysis of the socially vulnerable strata of the population that could potentially be involved in the demand of insurance services and the microinsurance models that could be applied in countries that have not still developed this form of insurance. It’s about the ability of low-income populations to meet their daily needs, in any economic environment and regardless of the degree of the economy development. The low standard of living and the inability to meet basic living needs can only at first glance point in the direction of the luxury of purchasing a particular insurance service. Uninsured risks, regardless of the type of risk in question, especially badly affect poorer categories of society which cannot cope with the catastrophic losses from negative shocks.


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