xprimm.com: What were the effects of the economic crisis for the Montenegrin insurance market?
Branko VUJOVIC: Montenegrin insurance market recorded high and consistent growth rates over the previous six-year period, which averaged at 17%. However, financial crisis had effect on slowing down of the Montenegrin economy, which reflected, to a certain extent, on the results of the insurance sector in 2010, as well. Thus, there was a mild decline of the gross written premiums on the insurance market in Montenegro in 2010, of 5.2%.

xprimm.com: For 2011, which is the market trend?
B.V.: Trends of this year indicate positive developments in the insurance market, along with the growth of 4.45% at the end of the second quarter, if compared to the same period last year.

xprimm.com: What types of insurance are dominant in the market portfolio?
B.V.: Non-life insurance has a dominant share in the Montenegrin insurance market, and it represented 86.6% of the total premiums in 2010, which is also the case with mandatory insurance activities - having a share of 47.7% in 2010 and with the trend continuing this year. Furthermore, the mandatory motor liability insurance activities continued to have a high share in the total premiums, of 46%, however with a growth trend of the life insurance activities of 3.5%.

xprimm.com: This year, what type of insurance had the highest growth rates?
B.V.: Comparative data for first six months of 2011 show that the most dynamic growth is recorded in suretyships travel insurance, insurance for carriage of goods, and property insurance (fire and allied perils). Additionally, the Montenegrin insurance market data, in terms of profitability, show that, in the observed period, most prominent were travel insurance, general liability insurance and voluntary health insurance.

xprimm.com: Were there significant changes (decisions/legislation) in the first half of 2011?
B.V.: Aimed at improving regulatory framework of the Montenegrin insurance market, during first six months of 2011 the Insurance Supervision Agency adopted two new enabling regulations: The Rulebook on Detailed Criteria and the Manner of Calculation of Technical Reserves for Outstanding Claims and the Guidelines for Money Laundering and Terrorism Financing Risk Analysis in Insurance Companies. Moreover, the Agency had rather significant legislatives activities directed at drafting of the Law on Insurance and the draft Law on Compulsory Transport Insurance, in order to harmonise them with the EU Directives.

xprimm.com: What are the main challenges for the next period?
B.V.: Key challenges to be faced in the coming period included providing incentives for a more dynamic development of the insurance market, through change of legislation in line with the European standards, and growth of the share of voluntary insurance activities.

Further development activities will include, inter alia, improvement of insurance companies operations, in particular the corporate governance segment, risk management and establishment of an adequate system of control and supervision. A particular importance will also have the introduction of complex products on the market, to be followed with insurance activity promotion and broader-range education of citizens. Mentioned activities should result in building and strengthening the confidence of insured, as a prerequisite for the development of this financial market segment.