TIRANA, April 27 – Albania’s insurance market slightly contracted in the first quarter of this year affected by a tax hike leading to higher insurance rates. Data published by the country’s Financial Supervisory Authority shows insurance premiums in the first quarter of this year dropped by an annual 2.7 percent to 2.9 billion lek (€21 million) as the number of insurance policies, dominated by compulsory car insurance, slightly fell by 1.3 percent to 222,422.
However, paid claims in the insurance market rose by 14 percent to 805 million lek (€5.75 million) in the first quarter of the year.
Compulsory car insurance, known as Motor Third Party Liability, increased its market share to 67.4 percent in the first quarter of this year, up from 64 percent during the first quarter of 2015.
Starting Jan. 2016 the tax on insurance premiums except for life, travel health and Green Card motor insurance, has increased to 10 percent, up from a previous 3 percent, affecting compulsory motor insurance which accounts for two-thirds of the market. The hike has been reflected on higher insurance policy rates.
Albania’s non-life and compulsory insurance oriented insurance market grew by 21 percent in 2015 and by 36 percent in 2014 after a 4.6 percent annual decline in 2013.
Some ten insurance companies operate in Albania, including recently privatized INSIG operator. Last March, Albanian-owned Eurosigwon a tender to purchase state-run insurance company INSIG for €15.8 million. The acquisition increased the insurer’s market share to 20 percent.
Once the holder of a monopoly of the Albanian insurance market, INSIG, which also operates in neighbouring Kosovo and Macedonia, had been losing considerable market share in recent years due to the market liberalization and tough competition from private players.
INSIG’s saw its Albania market share further drop to 5.84 percent in 2015 in the non-life segment while its life insurance share dropped to 8.42 percent, down from 11.8 percent in 2014.
