TIRANA, June 27 – Albania’s insurance market continued growing in the first half of this year, apparently triggered by a hike in compulsory motor insurance rates, accounting for half of the market income.
A report by Albania’s Financial Supervisory Authority shows insurance premiums in the nine private companies operating in this market grew by an annual 12 percent to 7.4 billion lek (€55 mln) in January-June 2017.
The first-half performance was fuelled by a hike in compulsory car insurance rates in early 2017 and higher number of insurance policies.
Meanwhile, paid claims also registered a strong 44 percent growth to 2.7 billion lek (€20 mln) in the first half of this year, with more than half of them going to compulsory motor insurance to cover car accidents.
The number of car accidents in the first half of this year slightly dropped to about 900, claiming 105 lives, down from 130 during the same period last year, according to INSTAT, the state statistical office.
The death toll is one of Europe’s highest considering Albania’s total of 530,000 motor vehicles in a country of 2.8 million residents. Experts blame the high number of accidents on reckless driving, poor road infrastructure and lack of road signs.
Growth in Albania’s non-life and compulsory insurance oriented insurance market slowed down to about 10 percent in 2016, following strong double digit growth rates in the previous couple of years.
Some nine insurance companies operate in Albania, including recently privatized INSIG operator. In March 2016, Albanian-owned Eurosig purchased INSIG for €15.8 million, with the acquisition increasing the insurer’s market share to 20 percent.
The insurance market is dominated by Austrian companies holding about 55 percent of the market share.
The companies often apply simultaneous price hikes, triggering probes by the country’s competition authority over allegations of price-fixing deals.
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 International Monetary Fund.
