Insurance market growth at 4.7 % in Jan.- Sept

TIRANA, Oct. 26 – New insurance premiums during the first three quarters 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 6.5 billion lek, up only 4.7 percent compared to the same period last year. The situation remains problematic despite the number of insurance policies doubling to 933,807, 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. Compulsory motor insurance premiums continued their falling trend, reaching 3 billion lek, down 7.8 percent compared to the first nine months of 2010. Personal accidents and health premiums during the first eight months of this year reached 708 million lek, registering an increase of 142 percent year-on-year. Health insurance premiums accounted for around 90 percent of revenues within this group. Gross paid claims, 80 percent of which belong to motor insurance, rose by 3 percent to 1.6 billion lek. In 2010, the insurance market grew by 4.17 percent compared to 2009, when the market rose by 11.3 percent y-o-y. Albanians pay on average 20 dollars annually for compulsory and voluntary insurance of vehicles, as well as property and life insurance– a small amount compared to other European countries. Experts say the liberalization process for compulsory insurance market is expected to lower insurance premiums in the short term. However, insurance rates are expected to increase in the long term as companies move to improve services. The government decision is expected to introduce varying insurance fees for car owners based on personal damage records, driving experience, and car age.