UDC: 005.591.6:368 ; 005.591.6:336.07

DOI: 10.7595/management.fon.2013.0014

The aim of this paper is to review the recent progress in innovation activities of investment funds and insurance companies. The paper reviews the main innovation trends globally, their causes and consequences. The research has identified that innovations of insurance companies and invesmtnet funds are predominantly incremental and focused on products although they usually refer also to processes, marketing and overall organisation. In investment fund industry, the main innovations recently have been credit swap defaults (CDS), Exchange Traded Funds (ETF), hedge funds, social impact bonds and other innovative products. In insurance industry, in addition to incremental innovations such as amendments to contracts terms and conditions, recent innovations encompass microinsurance, enterprise risk management, e-business applications, bancassurance, index insurance and alternative risk transfer. By summarizing the current state of knowledge of innovation activities among insurance companies and investment funds, the paper can be useful for domestic investment funds and insurance companies to identify possible areas for innovation as well as for government bodies to understand why fostering creation of innovation-friendly environment will bring benefits not only to financial services industry but to the society as a whole. Finally, the results presented in the paper are a good starting point for future research.

Keywords: innovation, insurance companies, investment funds.

Vladimir Njegomir¹, Jelena Demko Rihter²

¹Faculty of Legal and Business Studies, Novi Sad

²Faculty of Technical Sciences, Novi Sad

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