Insurance market growth slows down in 2010

TIRANA, Jan. 10 – New insurance premiums during 2010 climbed to 8.2 billion lek (around 82 million dollars), up 4.17 percent compared to the January-December 2009, registering a significant drop compared to 2009 when the market increased by 11.3 percent year-on-year. The number of insurance policies continued declining during the whole of 2010, dropping to 736,278, down 2.57 percent compared to 2009, the Financial Supervisory Authority said in a statement.
The market continued remaining non-life oriented with around 89 percent of the total premiums, leaving life insurance with a 10.3 percent share and reinsurance with 0.7 percent. Compulsory insurance premiums accounted for a majority of 52 percent compared to 48 percent for voluntary insurance.
During the January-December 2010, gross paid claims, the majority of which belongs to motor insurance, grew by a record 32.6 percent compared to the same period in 2009. A majority of around 83.2 percent of them, worth 1.9 billion lek (19 million dollars) went to pay motor insurance claims.
The biggest increase is reported in the most common Green Card car insurance which more than doubled to 1,405 claims, compared to the 666 claims during the whole of 2009. Claims for domestic MTPL and Casco insurance remained at almost the same levels as in the January-December 2009.
In 2009, the insurance market registered a 11.28 percent increase with the number of insurance policies up 63,332 compared to 2008. Gross paid claims at the end of 2009, grew by 1.72 billion lek or 11.5 percent compared to 2008.
According to the Financial Supervision Authority, Albania continues to be one of the countries having the lowest annual consumption per capita of insurance.
Albanians pay on average 20 dollars annually for compulsory and voluntary insurance of vehicles, property and life, a small amount compared to other European countries.
The insurance market continues to be dominated by Sigal which holds 24 percent of the compulsory and 41 percent of the voluntary market, according to the Authority.
State-owned insurer Insig, which has been put on the privatization list of public assets, is currently the fifth biggest insurer, controlling 7.3 percent of the compulsory market and 11 percent of the voluntary.
The Albanian insurance market has registered gradual expansion, albeit from a low base, said the European Commission in its latest report. In 2008, total assets amounted to approximately 1.4% of GDP. All 10 licensed companies active in the sector are domestic, but since 2007 Albania has attracted increased foreign (EU) participation. In the voluntary insurance sector, non-life insurance represents around 83% of turnover. The private pensions market is still underdeveloped. Three companies are licensed to offer private pensions. At the end of 2009, the legal framework for private pensions was amended by a new law on voluntary pension plans. The law opens up the possibility for the establishment of defined contributions third pillar pension funds, but does not reflect all the provisions of the acquis. Overall, the non-banking financial sector is still undeveloped and plays a negligible role as a source of private sector financing.
The Tirana Stock Exchange was formally established in 1996, but there are no companies
listed on the stock exchange.