Elisabeta GJONI, Chairperson Albanian FSA

15 September 2011 — Vlad BOLDIJAR
elisabeta_gjoniXPRIMM: How have the trends of economy reflected in the insurance market activity (1H/2011)?
Elisabeta GJONI: Despite the slowdown in the economy in the last years, the insurance sector in Albania in the first half of 2011 managed to continue its positive growth trend, experiencing an 8.5% increase in gross written premiums, in the light of 4% growth in 2010, marking a positive prospect for the period to come. Especially the voluntary insurance has performed quite well, maintaining its growth dynamics which was as high as 21.7% for the first half of 2011. Also life insurance is continuing its growth at the high dynamics of the recent years, which in the first half of 2011 was around 40%.

XPRIMM: What classes of insurance were the most profitable and dynamic in 1H/2011?
E.G.: In terms of both profitability and dynamics, voluntary insurance has shown both of these characteristics during the first half of 2011. Accident and Health insurance as well as Property, lie among the most dynamic lines of business in Non-Life insurance during the first half of 2011. Life insurance on the other hand is also growing at a considerable dynamics, which is around eight times the Non-life segment growth.

XPRIMM: In times of crisis, which were the most important changes in marketing strategies of insurance companies?
E.G.: Some of the most important changes in marketing strategies noted in some insurance companies, during crisis are related to the review of their pricing systems in voluntary insurance, withdrawal or restrictions regarding some existing covers, as well as more in-depth investigation when it comes to big risks as well as lowering the authorization level for sales personnel.

XPRIMM: There were significant changes (decisions / legislation) in the first half of 2011?
E.G.: The Parliament approved in July 2011 the Law no. 10.455, date 21.7.2011 "On some amendments of the law no. 10.076, date 12.2.2009 "On compulsory insurance within the transport sector". These amendments allow the insurance companies to set their own premiums tariffs. The Authority shall approve rules on the determination of the general conditions of the compulsory insurance contracts as well as on the level of the technical provisions. Notwithstanding the liberalization of the compulsory insurance premium tariffs, the insurance companies still have to create provisions not below the level determined by the Authority. In the context of these legal amendments, AFSA drafted the new Regulation "On the determination of the technical provisions of compulsory insurance within the transport sector", together with the premium tables for the calculation of the provisions of compulsory insurance.
AFSA is working also on the drafting of a new law on insurance which is going to be approximated with the insurance EU Directives and support the new risk-focused supervision methodology. The draft-law shall be finalized by the end of 2011, after which the AFSA is going to initiate the adoption procedures.

XPRIMM: What are your expectations for the end of 2011? (forecast)
E.G.: The market prospect is believed to be positive in terms of growth, with the voluntary insurance playing the major role, while this trend might be affected by new insurance premiums applied recently in MTPL. The structure of the market is expected to improve further, in favour of voluntary insurance, which might even dominate for the first time in the Albanian market.
By the end of 2011 a series of important developments are expected and which are in process by the AFSA. The main focus will be the development of a bonus-malus system to support MTPL liberalization as well as the development of the implementation strategy of the new risk-focused methodology for insurance supervision together with the proposal of the new draft law in Insurance to support the new regime.

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