Tirana dominates insurance market with a 67% share

TIRANA, Sept. 9 – Albania’s insurance market continues remaining highly concentrated in Tirana which accounts for almost two-thirds of the market revenue, according to an annual insurance geography report published by the Financial Supervisory Authority.
The region of Tirana, where a quarter of the country’s 2.8 million resident population lives, accounts for more than one-third (38 percent) of the country’s GDP with the services sector dominating with 67 percent, according to a previous regional GDP report for 2012 published by the country’s state statistical Institute, INSTAT.
While the region of Tirana provides 67.23 percent of total insurance premiums, the contribution in other regions ranges from 0.71 percent in the northeastern region of Kukes to 7.35 percent in Durres. The regions of Fier and Shkodra account for 4.3 percent and 3.96 percent of the market share respectively.
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. Albania’s per capita consumption of insurance dropped by 271 lek to 2,929 lek (Euro 20.5) in 2013, the lowest in the region.
Tirana also leads in terms of paid claims with a 60 percent share followed by the southern region of Vlora 6.86 percent.
Affected by a double-digit decline in compulsory motor insurance, the insurance market shrank by 4.6 percent in 2013, registering the first decline in the past five global crisis years.
Albania’s insurance market rose by 7.8 percent in 2012, by 1.8 percent in 2011, 4.17 percent in 2010 and by 11.3 percent in 2009 soon after the outbreak of the global financial crisis.
Albania’s Competition Authority has launched an enquiry into the insurance market over an alleged price-fixing deal which is alleged to have limited competition in the compulsory motor insurance policies.
Some nine insurance companies operate in Albania, of which only INSIG remains wholly state-owned following unsuccessful privatization attempts.
The Albanian insurance market is overwhelmingly non-life oriented with around 87.7 percent while voluntary insurance accounts for 54.2 percent of total insurance premiums.
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.