TIRANA, Sept. 29 – Life insurance lost considerable ground in Albania’s insurance market in the first eight months of this year, with its market share dropping to only 7 percent.
Data published by the country’s financial supervisory authority shows Albanians spent only 629 million lek (€4.4 mln) on life insurance in the first eight months of this year, down 10 percent compared to the same period last year.
The life insurance market, dominated by credit life insurance, saw its market share decline to 7 percent in January-August 2015, down from 9.3 percent a year ago, said the supervisory authority in its latest report. However, paid claims in the life insurance market more than doubled to 133.5 million lek (€943,000) in the first eight months of this year.
Some three companies operate in the life insurance market in Albania including state-run INSIG which is the only operator to operate in both the life and non-life segments.
Life insurance in Albania is dominated by credit life as commercial banks require customers to buy credit life insurance sufficient to cover the unpaid loan balance. Next comes group life insurance offered by large employers and life savings insurance offered by credit unions and pension funds.
A recent World Bank report says that although life insurers have introduced long term life insurance products with saving elements, “the difficult economic conditions and the lack of insurance tradition do not bode well for a quick growth of life insurance in Albania.”
Albania’s insurance market grew by 18.8 percent to about 9 billion lek (€63.5 mln) in the first eight months of this year, with compulsory auto insurance accounting for about 65 percent of the market.
Albanians spent an average of 4,009 lek (Euro 28.2) on compulsory and voluntary insurance of vehicles, as well as property and life insurance in 2014, up from 2,929 lek (Euro 20.6) in 2013, a small amount compared to the regional average.
