Browse the complete Report on: Slovenia Insurance Report Q4 2010
Writing at the beginning of August 2010, we have been able to ensure that the report includes actual data for 2009. According to the Slovenian Insurance Assocation (Slovensko Zavarovalno Združenje, SZZ), total premiums in 2009 amounted to EUR2.08bn. This includes non-life premiums of EUR1.45bn and life premiums of EUR630mn. In 2014, the corresponding figures should be EUR2.70bn, EUR1.95bn and EUR747mn. In terms of the key drivers that underpin our forecasts, we are looking for non-life penetration to remain constant at around 4.4% of GDP. We are looking for life density to rise marginally from US$444 to US$450 per capita. BMI's proprietary Insurance Business Environment Rating (IBER) for Slovenia is 58.4 out of 100.
Slovenia’s Insurance Sector In 2010
Slovenia’s insurance sector was one of the strongest and most stable in Central and Eastern Europe in 2009. Figures from the SZZ indicated that in the first nine months of 2009 non-life premiums rose 5% to EUR1,124mn, and life premiums fell 4% to EUR467mn. It is fair to say that the non-life segment is among the fastest growing in the region and the life segment has escaped the trauma suffered by its peers elsewhere. Only Turkey, where life insurance is developing rapidly as a result of lower overall levels of financial risk, Croatia and the Czech Republic, where life premiums grew by 3-4% in H109, outperformed Slovenia in growth.
Slovenia’s well-developed life segment is unusual in a Central and Eastern European context, in that it is dominated by unit-linked products, which accounted for EUR279mn out of the EUR467mn in life premiums written in the first nine months of 2009. Impressively, given the volatility in financial markets in 2008, unit-linked premiums remained virtually unchanged.
Of the non-life lines, compulsory motor third party liability (CMTPL) stood out for the fall in gross premiums, from EUR277mn in the first three quarters of 2008 to EUR256mn in the same period of 2009. In most other non-life lines premiums increased, in some instances by a significant amount. Health insurance premiums grew from EUR290mn to EUR311mn. CASCO rose from EUR170mn to EUR189mn.
The SZZ’s figures for 2009 indicate that there have been only minor changes to market shares. In the nonlife segment, the share of former state-owned monopoly Triglav fell slightly, to 37%, while that of Maribor slipped to just over 14%. The shares of Adriatic Slovenica and Vzajemna rose slightly, to about 17%. Triglav and Maribor appear to have lost ground slightly in the life sector too (where they had 34% and 11% of gross premiums respectively).
On the basis of the figures published by the SZZ in relation to the first five months of 2010, we are currently looking for non-life premiums to track sideways this year. Life premiums appear set for another year of contraction: we envisage that they will diminish by 8%. Nevertheless, it seems reasonable to expect that both segments will return to a trend of modest growth from 2011. Relative to Q310, Slovenia’s IBER has fallen slightly. This is because the anticipated absolute growth of the sector is less than we had previously been forecasting.
Issues To Watch
Pricing In The CMTPL Line
The divergent directions of premiums in CMTPL and CASCO lines across much of 2009 suggest there may be strong downwards pressure in the former.
Continuing Growth In Unit-Linked Insurance
The development of unit-linked products has been key in underpinning life segment stability in recent months.
Further Expansion Of Slovenian Insurers Into Other Markets In Central And Eastern Europe
Slovenia now has most of the characteristics of a fully developed insurance market.
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