Paid claims during the first six months of this year reached 1.36 billion lek, down 8.9 percent compared to the same period last year
TIRANA, July 30 – Affected by a double-digit drop in motor insurance premiums, the insurance market slowed down to 2.5 percent in the first half of this year although paid claims dropped by around 9 percent year-on-year, says a report by the Albanian Financial Supervisory Authority. Insurance premiums in the first half of 2013 reached 4 billion lek, up only 2.45 percent compared to the same period last year. Data show the slowdown was first of all affected by a double-digit drop in the compulsory motor insurance DMPL, accounting for around 40 percent of the market share, which in the first half of 2013 dropped by 13 percent. The number of insurance policies during the first half of 2013 also dropped by 3.5 percent to 453,288.
The Albanian insurance market is overwhelmingly non-life oriented with around 87.5 percent while voluntary insurance accounts for 57 percent of total insurance premiums. Data show Albanian insurance companies are paying out less in claims during this year. Paid claims during the first six months of this year reached 1.36 billion lek, down 8.9 percent compared to the same period last year. Fuelled by an increase in compulsory car insurance rates, Albania’s insurance market rose by a moderate 7.4 percent in 2012, registering the biggest increase in the past three years.
Last October, eight insurance companies operating in Albania were fined a total of 89 million lek (Euro 625,000) after the Competition Authority uncovered a price-fixing deal in compulsory motor insurance policy. The deal was made in February 2012 when all companies fixed motor insurance prices in a banned deal severely damaging competition. Two years after the liberalization of the compulsory car insurance market, the Albanian Financial Supervisory Authority says it has concluded a project targeting efficient tariffs based on risk and the implementation of a Bonus-Malus system under which drivers with a clear driving record will pay less. The new scheme takes into consideration the cars’ age and engine capacity, but also driving record and geographical area. Recent price movements have been very turbulent and this turbulence will continue in the short term, warns the World Bank.
