Insurance companies spend less on claims

TIRANA, Nov. 29 – Albanian insurance companies have cut spending on claims as their revenues remain at a standstill since the 2008 global crisis. For the first time at least during the past two years, the Albanian the Financial Supervisory Authority reports an annual 2.6 percent drop in paid claims during the first ten months of this year.
“The overall amount of gross paid claims for January-October 2011 was at 1.74 billion lek, or 2.62 percent less than the same period last year.” The majority of them, 80 percent or 1.4 billion lek belongs to motor insurance.
New insurance premiums during the first ten months of this year hit a record low confirming the inability of the insurance market to return to pre-crisis double digit growth rates. Latest data published by the Financial Supervisory Authority this week show new insurance premiums during the first nine months of this year reached 7.1 billion lek, up only 4.5 percent compared to the same period last year. The situation remains problematic despite the number of insurance policies doubling to around 1.1 million, mainly because of increased demand in health insurance policies following the liberalization of the visa regime in mid-December 2010. The market continued remaining non-life oriented with around 87.5 percent of the total premiums, leaving life insurance with a 12 percent share. Voluntary insurance premiums accounted for a majority of 54 percent compared to 46 percent for compulsory insurance.
At present there are ten companies operating in the Albanian insurance market. Seven of these only operate in the non-life sector, two companies are purely involved in life insurance and one insurance company is active in both segments. Insurance density (per capita annual premiums) in Albania stood at around EUR 18 in 2010. In the same year, this figure came to around EUR 75 in Serbia and around EUR 2,500 in the EU15 countries. Insurance penetration (premiums as a proportion of GDP) was around 0.67 percent in Albania, compared with 1.8 percent in Serbia and 8.7 percent in the EU15 countries.