In this paper the authors wanted to reveal the relationship between overall economic development measured by gross domestic product per capita (GDPPC) influences the insurance market development measured by indicators such as gross written premium per capita (GWPPC) and the share of gross written premium in GDP. Therefore, the authors have calculated correlation coefficients for EU27, and separately for old EU members (EU15) and new EU member states (EU12) for the 2000-2009 period. Moreover, this analysis is conducted for total insurance markets as well as for the both life and nonlife insurance segments. The results of the analysis of the correlation coefficient indicate strong and positive correlation between overall economic development and insurance development in EU27 and particularly in EU12. Moreover, the authors conducted panel analysis to find out how the overall economic development affects insurance sector growth. The results of this analysis reveal that overall economic development has an influence on the demand for insurance that is especially evident in new EU member states.