TIRANA, May 27 – Paid claims in the Albanian motor vehicle dominated insurance market registered a significant double digit increase in the first four months of this year, hinting better consumer protection.
Data published by the country’s Financial Supervisory Authority shows paid claims in the first four months of this year rose 22.5 percent to around 1 billion lek (€7 mln) but yet accounted for only around a quarter of gross written premiums.
Albania’s insurance market rose by 17 percent to 4.1 billion lek (€28.5 mln) in the first four months of this year fuelled by a 35 percent hike in compulsory motor insurance which increased its market share to around 63 percent in the first four months of this year.
Back in 2014, Albania’s insurance market grew by a record 36 percent to 11.6 billion lek (Euro 81.7 million), fuelled by a 79 percent increase in the compulsory motor insurance which includes the domestic MTPL, border insurance and the Green Card insurance. However, paid claims, the overwhelming majority of around two-thirds of which also belong to motor insurance, rose by only 4.7 percent to 2.3 billion lek (around 16 million euros) which is around one-fifth of the companies’ income.
In its latest financial system stability assessment, the IMF describes Albania’s insurance market as one of the smallest in Europe, with assets of around 1.5 percent of total financial system assets. “Its development has been hindered by several factors, including lax insurance regulation, low disposable incomes, and a poor record of claims performance,” says the Fund.
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.
