BULGARIA: Only 14.5% of homes covered by property insurance

While residential real estate in Bulgaria has expanded in recent years, the property insurance market remains underdeveloped, well below its true potential.

During Investor Media Group's recent event dedicated to the financing and insuring of homes and properties in Bulgaria, they presented data on the evolution of the housing market inside the country, which shows a positive growth rate, indicating that the housing market is recovering after the 2007-2008 financial crisis, when the market almost halved.

In 2018, there were around 15,000 apartment projects started, showing an increase compared to 2017, when 8,000 new buildings were constructed. The rise in the construction market from the past 10 years was accompanied by a rise in the population, the average increase in population from Bulgaria being 32,000 people per year. However, the numbers for the property insurance market remain at low levels.

"Only 14.5% of homes in Bulgaria are insured and this is largely due to the mandatory insurance that banks impose on mortgage lending," said Manu MORAVENOV, a Lecturer at University of Finance, Business and Entrepreneurship in Bulgaria (VUZF).

The latest official statistics published by The Financial Supervision Commission for Bulgaria (FSC) for the first three quarters of the Bulgarian insurance market, show that the size of the property insurance line sits below a 12% share, in terms of GWP in total market weight.

"It turns out that Bulgarians love their cars more than their homes, because for a much smaller amount of money paid, they can insure their homes too," said Nikolay GENCHEV, CEO at UNIQA. He also pointed to the fact that over 90% of homes in Central Europe are insured, while the neighboring EU countries are aiming for a 20% share level of property insurance, while Bulgaria is still lagging behind.
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