Insurance is a way to even out the economic consequences of various risks. The purpose of insuring is to secure the everyday life and financial standing of individual people, companies and organisations.
Insurance companies are divided according to their line of business into life, non-life and employee pension insurers. Although one company may engage in one line only, the companies often form insurance groups or otherwise co-operate with each other.
Insurers can operate as mutual insurance companies or limited companies. In addition to these, foreign insurance companies sell insurance in the Finnish market through their branch offices. Some foreign insurers also provide cross-border services without an office in Finland.
The Finnish insurance market is characterised by a large proportion of statutory insurance policies. Two thirds of the total premiums written come from statutory insurance.
Employee pension insurance and workers’ compensation insurance, both of which are a part of the Finnish social security scheme, are examples of statutory insurance. Motor liability insurance, patient insurance and environmental liability insurance are also statutory insurances.
Insurers’ operations are governed by several laws, the most important of which are the Insurance Companies Act and the Insurance Contracts Act. Each statutory insurance line is also governed by its own Act. The insurance sector is monitored by the Financial Supervisory Authority.
The Finnish insurance market has developed well, and the overall demand for insurance is high. According to studies nearly half of all Finns consider voluntary insurance policies a necessary supplement to social security.