In the conditions of economy market insurance becomes one of the most dynamical branches of economic activities. Insurance promotes protection of valuable interests of people and the enterprises, and as stability and reliability of enterprise activity. The availability of insurance protection stimulates development of market relations and activity. The aim of research is to consider the economic nature of insurance consisting of available special relations of income distribution, which are created on the basis of premiums paid by the insured. For research objective achievement various methods of research are used. The analyses of statistical data are carried out, the structure of the insurance market of Latvia, and as the factors influencing development of the insurance market are investigated. The given research makes it possible to draw the following conclusions: - insurance is an important service for both households and enterprises; - insurance adds confidence in further prospects; - insurance promotes effective functioning and development of national economy as a whole.