TIRANA, April 8 – After several unsuccessful privatization effort, the Albanian government has adopted some legal changes to ease the privatization of the only wholly state-owned insurer, INSTAT, which has been losing considerable market in recent years and accumulating losses.
In some legal changes approved this week at the legal affairs parliamentary committee, MPs voted to remove INSIG, which also operates in neighbouring Kosovo and Macedonia, from the list of strategic privatizations, allowing ordinary procedures for its privatization.
“INSIG finds itself in a severe financial situation and has been losing considerable market with its current share at less than 7 percent and out of the top-three insurance companies,” said Economy Minister Arben Ahmetaj, confident that the new privatization effort will prove successful.
INSIG, once the holder of a monopoly of the Albanian insurance market, has been losing its market share in recent years due to the market liberalization and tough competition from private players.
Back in 2009, American Reserve Life Insurance, a part of Heritage Guaranty Holdings, withdrew at the last moment after offering 25 million Euros ($36.9 million) for 61 percent of INSIG’s shares.
The Albanian insurance market, dominated by two Austrian insurance groups, is overwhelmingly non-life oriented with around 91 percent while compulsory insurance accounts for 60 percent of total insurance premiums.
Some ten insurance companies operate in Albania, of which only INSIG remains wholly state-owned following unsuccessful privatization attempts.
