Albanians pay on average 25 dollars annually for compulsory and voluntary insurance of vehicles, as well as property and life insurance– a small amount compared to other European countries
TIRANA, July 25 – The region of Tirana, where around one-third of the country’s 3.2 million population lives and most businesses operate, accounts for more than 60 percent of the insurance market in Albania, according to a 2010 report published by the Financial Supervisory Authority. The report on Albania’s insurance geography shows the region of Tirana, which includes the districts of Tirana and Kavaja constitutes 61.17 percent of the insurance market.
Second comes the region of Durres with 7.89 percent followed by the southern regions of Fier with 5.23 percent and Korca at 5.19 percent. Insurance market share in the remaining regions varies from 0.59 percent in Kukes to 4.12 percent in Gjirokastra.
However, Albania’s per capita consumption of insurance at around 2,550 lek (25 US dollars) is considered one of the lowest. Albanians pay on average 25 dollars annually for compulsory and voluntary insurance of vehicles, as well as property and life insurance, a small amount compared to other European countries.
Non-life insurance accounts for 90.5 percent of insurance market with 666,363 policies in 2010 compared to 9.5 percent or 69,915 life insurance policies.
New insurance premiums during 2010 climbed to 8.2 billion lek (around 82 million dollars), up 4.17 percent compared to the January-December 2009, registering a significant slowdown compared to 2009 when the market increased by 11.3 percent year-on-year.
The number of insurance policies continued declining during the whole of 2010, dropping to 736,278, down 2.57 percent compared to 2009, the Financial Supervisory Authority says.
During 2010, gross paid claims, the majority of which belongs to motor insurance, grew by a record 32.6 percent compared to the same period in 2009. A majority of around 83.2 percent of them, worth 1.9 billion lek (19 million dollars) went to pay motor insurance claims.
Latest data made available by the Financial Supervisory Authority show new insurance premiums during the first half of this year reached 4.3 billion lek, up 8.54 percent compared to the same period in 2010, despite the number of insurance policies doubling.
Insurance premiums in the “personal accidents and health” category grew by 155 percent to 509 million lek. The situation is also a result of the visa-liberalization regime which has been in force since mid-December 2010.
Premiums from compulsory domestic MTPL motor insurance dropped by 22 percent despite the number of insurance policies growing by 3.45 percent compared to the first half of 2010. The situation hints a drop in insurance rates.
A recent government decision to liberalize car insurance premiums has been welcomed by insurance companies operating in the country who say that the market will now liberalize and services will improve. Insurance companies used to operate under fixed rate premiums which cannot be lower than 11,000 lek annually set by the Finance Ministry. Experts say the liberalization process for compulsory insurance market is expected to lower insurance premiums in the short term. However, insurance rates are expected to increase in the long term as companies move to improve services. The government decision is expected to introduce varying insurance fees for car owners based on personal damage records, driving experience, and car age. Some 427,000 motor vehicles are registered in Albania. The number of cars in Albania currently at 121 per 1000 inhabitants is the lowest in the region compared to Serbia, Macedonia, and Bosnia and Herzegovina, concluded a study by Open Data portal.
