Auto insurance market share up to 45%

TIRANA, April 30 – Compulsory motor insurance increased its market share to around 44.5 percent in the first quarter of this year, up from 41.7 percent during the same period last year, according to data published by the Financial Supervisory Authority. The recovery was a result of sharp rise in motor insurance rates, which have more than doubled compared to early 2013.
Premiums in the compulsory MTPL auto insurance rose by 37 percent to around 1 billion lek (Euro 7 million) in the first quarter of this year despite the number of insurance policies dropping by around 19 percent.
The insurance market grew by 26.6 percent to 2.6 billion lek (Euro 18.5 million) in the first quarter of 2014, while paid claims remained almost unchanged at around 600 million lek.
The increase is a result of compulsory auto insurance trading at an average of 15,000 lek (Euro 105), double compared to the early 2013.
All insurance companies were forced to reduce prices last February in order to maintain their market shares after INSIG cut rates by around 20 percent to 16,000 lek (Euro 112). INSIG’s market share in the compulsory motor insurance dropped to 6.14 percent in 2013, down from 7.41 percent in 2012, according to the Financial Supervisory Authority.
The market shrink in 2013 seems the reason behind the increase in motor insurance rates in early 2014. Affected by a double-digit decline in compulsory motor insurance, the insurance market shrank by 4.6 percent in 2013, registering the first decline in the past five global crisis years.
Data published by the Financial Supervisory Authority show insurance premiums in 2013 dropped by 4.63 percent to 8.5 billion lek (Euro 60 million), affected by a 15.5 percent decline in compulsory motor insurance premiums, which account for around 40 percent of the market share.
The Albanian insurance market, dominated by two Austrian insurance groups, is overwhelmingly non-life oriented with around 87.7 percent while voluntary insurance accounts for 54.2 percent of total insurance premiums.
In its latest financial system stability assessment, the IMF describes Albania’s insurance market as one of the smallest in Europe, with assets of around 1.5 percent of total financial system assets. “Its development has been hindered by several factors, including lax insurance regulation, low disposable incomes, and a poor record of claims performance,” says the Fund.