Albanian insurance companies in Kosovo head bankruptcy

Tirana Times
By Tirana Times June 6, 2019 13:59

Albanian insurance companies in Kosovo head bankruptcy

Story Highlights

  • According to the CBK, an insurance company is in poor financial condition when it has financial difficulties in meeting legal requirements regarding capital adequacy and solvency.

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TIRANA, June 6- The Central Bank of Kosovo has taken the decision months ago to revoke the license of the “INSIG” insurance company. The Bank it took this decision because the company did not meet the legal requirements. The insurance company “Eurosig” seems to be undergoing in the same situation.

Less than two months after the insurance company INSIG started operating in Kosovo, its license was retrieved. The company “Eurosig” which is currently under the strict management of the Central Bank of Kosovo, is heading towards bankruptcy due to the poor financial situation. Eurosig is an Albanian-owned company which also owned INSIG in Kosovo. Although “Eurosig” is administered by the CBK, the bank has refused to give many details. However, officials from the bank said the board will soon make a decision for this company.

“CBK has been monitoring the company for some time. But for future decisions of the CBK Executive Board in relation to the insurer Eurosig Sh.A. you will be soon notified,” said the Bank.

According to the CBK, an insurance company is in poor financial condition when it has financial difficulties in meeting legal requirements regarding capital adequacy and solvency. The company Eurosig, according to the information provided on the website, was established as a general insurance company in September 2004 under the name DUKAGJINI Sh.A. (Sh.A. stands for ‘shareholder company’). In December 2005 the company sells 100 percent of its shares and in March 2006 enters the market with the name Eurosig Sh.A., entirely with domestic capital and with new shareholders. The company’s website also shows that after twelve years of activity in the insurance industry, Eurosig ranks second in the insurance market in Albania, with 15.63 percent of the general insurance market.

Eurosig in 2014 has been extended to Kosovo by buying the insurance company “Dardania” and privatizing INSIG in 2016 (with a decision from the Council of Ministers of 23 March 2016), has brought the expansion of Eurosig’s activity in the insurance field in Kosovo and Macedonia. The Eurosig Group now consists of Eurosig Albania for general insurance activity, Eurosig Kosovo for general insurance activity, Eurosig Macedonia for general insurance activity, INSIG Albania for general insurance activity, INSIG Kosovo for general insurance, and INSIG Albania for life insurance activity. Currently, Eurosig Kosovo ranks first in the general insurance business there. Eurosig Macedonia is also growing rapidly in the general insurance market in the country.

“These developments have had a significant positive impact on Eurosig, the growth and consolidation of its action in the insurance market in Albania and the region,” writes the company in its website.

At the Central Bank of Kosovo it was shown that based on the financial reports submitted to the CBK for the period of Dec. 31, 2018, the company INSIG has been unsatisfactory since the value of total liabilities was considerably higher than the value of its assets. Thus, the company has been incapable of fulfilling its obligations, most of which has been against policymakers and other creditors. The shareholder of the company INSIG has not responded to the Bank’s requests for capital increase and compliance with the applicable legal requirements.

The insurance company INSIG was established in 1991 with 100 percent ownership of the Albanian Parliament to undertake insurance and reinsurance activities in the Republic of Albania, represented by the Ministry of Economy and Finance. On Mar. 1, 2000, INSIG was licensed to operate on the Kosovo insurance market as a subsidiary of the parent company in Albania. In 2015, INSIG Sh.A. changes ownership of shares, which are 100 percent owned by the Ministry of Finance. During 2016, the Tirana-based INSIG insurance company sold 100 percent of the state-owned shares to the insurance company Eurosig Sh.A., based in Tirana and owned by Kadri Morina. 

Tirana Times
By Tirana Times June 6, 2019 13:59