TIRANA, July 13 – The Albanian government has approved a formula on the privatization of INSIG, the state-run insurer which also operates in neighboring Kosovo and Macedonia.
Under the new formula on the sale of the 100 percent state-owned shares in INSIG, the submitted bids will be assessed based on the three criteria under which the highest bid will have the overwhelming 80 points, followed by the business plan and quality of investor with 10 points each.
The economy ministry will be responsible for organizing tender procedures on INSIG’s privatization whose current value is estimated at about 1 billion lek (€7 million).
The Albanian government has also recently contracted KPMG Albania, an Albanian subsidiary of the one of the Big Four firms, to audit INSIG’s 2015 financial reports in Albania, Kosovo and Macedonia. KPMG, which was selected in a tender, will be paid 4.5 million lek for the audit, says the Public Procurement Agency in its latest report.
Earlier this year, the Albanian government 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 after several unsuccessful privatization efforts.
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.
INSIG, once the holder of a monopoly of the Albanian insurance market, has been losing considerable 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.
