Enkeleda SHEHI
Executive General Director
Albanian FSA

XPRIMM: How do you comment on the 1H2016 overall results of the Albanian insurance market? What are the main trends recorded during the period?
Enkeleda SHEHI:
Overall, during the 1H2016 the Albanian insurance industry experienced positive developments in terms of the overall premium volume. The insurance market reached over ALL 6,619 million (47.99 million EUR) for the period January - June 2016, or 2.97% more compared to the period January - June 2015.

The market continued to be dominated by Non-Life insurance, which share was 92.68% of the total premium volume, Life insurance and Reinsurance market share was respectively 6.89% and 0.43% of the total premium volume. Market shares of voluntary and compulsory insurance gross written premiums were respectively 41.15% and 58.85%. Non-Life voluntary insurance during the period January - June 2016 experienced a decrease by 1.63% compared to the same period last year.

Payment of claims, during the period January - June 2016, increased by 29.92% compared to the period January - June 2015. Most of the gross paid claims were related to Motor insurance, about ALL 1,255 million (9.1 million EUR) or 66.13% of total gross paid claims.

XPRIMM: What are your expectations for the end year results?
According to the estimations based on some market analysis of the GWP trend in 2016, a significant growth of gross written premiums is expected during the second half of year 2016. This can be attributed to a number of factors, including the increase of domestic MTPL price by 20% starting from August 2016; seasonal effects always taking place in the second half of the year; the private sector credit growth can lead to the increase of life and property insurance policies related to the credit. The existing potential regarding the number of policies of voluntary insurance products could be another factor contributing to the GWP increase.

XPRIMM: Life insurance and property insurance lines have seen a negative change in GWP in 1H2016. We would highly appreciate more details explaining this trend
Gross written premiums in Life insurance business reached the value of ALL 456 million (3.31 million EUR), which indicates a decrease by 4.43% compared to the period January - June 2015. The decrease is mainly affected by the decrease of Debtor's life portfolio by 17.2% and Life with savings portfolio by 8.99%. The share of these two portfolios in the total value of Life-Insurance is the biggest with 77.73%, meaning that a decrease of these two portfolios would have a big impact on the Life insurance activity. The number of Life insurance policies reached 50,102 indicating a decrease by 6.09% compared to the period January - June 2015. As a consequence of a restrictive credit policy of banks and of the low business loan during the 1H2016, life insurance experienced a decrease as well.

Property insurance line decreased by 20.14% compared with the same period of the previous year. The reason for the decrease of total premium can be ascribed to the tax increase from 3% to 10%, leading to a fall of demand for this type of insurance, but as well to the fact that this type of insurance is also credit-related.

XPRIMM: Claims paid for the property insurance -"Fire and allied perills" class have seen a significant increase, although the overall amount is not very high. What was the main reason for this high growth?
Claims paid for the insurance against Fire and natural forces have increased 11 times more in comparison to the same period of the previous year. This led to an increase of the specific share of this class in the total value of the Non-Life insurance from 1.41% in January-June 2015 to 12.87% in January-June 2016. The increase can be ascribed to the claims made until 2015, but that by court decision (in the case of claims in court proceedings) were payed in the first half of 2016.

XPRIMM: The MTPL insurance line's increase in GWP seems to calm down, as compared with the previous periods. Would you consider the MTPL's market status as reaching an equilibrium point?
The MTPL insurance increased by 6.39 % during 1H2016 compared with the same period of the previous year. The number of MTPL policies increased by 8.19% in comparison to the period January-June 2015. The compulsory motor insurance continues to have, with 63%, the biggest share of non-life insurance in terms of gross written premiums. The MTPL's market still hasn't reached the equilibrium point as it is expected a rise in the MTPL gross premium volume during the next years. This rise can be driven by many factors such as: the number of uninsured cars, which is still high, the high difference of average premium between Albania and the region, the collaboration of AFSA with the universities in promoting the insurance sector. Based on the observation in the region and characteristics of insurance market the growth will start to decrease in the coming years.

Related articles


Hannah GRANT, Head of Secretariat, Secretariat of the Access to Insurance Initiative

The speed of change has no historical precedent. Change is occurring at an exponential, rather than linear pace. When it comes to greater access to insurance, these are exciting and unprecedented times. We would not describe inclusive insurance as a challenge to classical insurance per se. The ambition to include new people in the market or to cover new risks is often a driver for innovation. We see insurance markets are becoming more responsive and innovative. However, it should always be guaranteed that innovation and change is to the benefit of the policyholders.


Calin RANGU, Director, Intermediaries Supervision and Monitoring Rules of Conduct Department ASF - Financial Supervisory Authority, Romania

Most important are the proactive consumer protection actions. In this respect, ASF has set up a direction to supervise insurers' business conduct. This directorate develops supervision tools aligned to the risk-based supervision principle. Among these tools we mention thematically supervision, mystery shopping, social media monitoring, receiving and processing of bad conduit public alert information. We also put special emphasis on operational risks' management in insurance companies. These risks are in fact those that affect consumers. Employees behavior, lack of processes or inaccurate processes, internal or external frauds, lack of business continuity, IT and cybercrime problems all relate to operational risks and must be managed preventively to protect consumers.


Dr. Savvas TZANIS CEO, IMPERIAL Claims Services

Our customers are extremely happy with our services compared to their partners in Western Europe because they cannot understand them. It is definitely a matter of culture. With us, they feel that they can speak the same language and that we can understand them. So, our aim in the future will be to remain, invest and expand our activities in our region. We want to be a regional player. We try however to bring and apply in our region the best claims handling practices of the biggest loss adjusting groups in Europe they have.


Alexey RUDENKO, CEO, SBERBANK Life Insurance

We expect an increase of the investment life insurance penetration in Russia due to the new legislation on unit-linked, which will allow us to offer new products without guarantee in the context of falling rates. The source for potential growth is the inclusion of life insurance in the new pension system, where insurers could become operators of voluntary pension savings along with non-government pension funds.


Matteo CARBONE, Founder and Director, IoT Insurance Observatory

Don't fall in love for a technology: any solution sooner or later will become obsolete; any investment sooner or later will represent a legacy. The innovation is not a final destination, it is a journey. You cannot stop to innovate. Innovate or die.


Klime POPOSKI: in the Balkans, we need a regional center for actuarial education

"Most of the South Eastern Europe countries lack quality actuarial education. On the other hand, each country has different rules for organizing the educational circles for actuaries. It is mostly a matter of scale: there are not enough persons interested by an actuarial career in each country, meaning that it is not cost effective to organize every year educational programs for the actuarial field. We need to set up some regional center for actuarial education," Klime POPOSKI, President Insurance Supervision Agency, Macedonia stated for XPRIMM in a video interview recorded on the occasion of "IIF 2018 - CEE & SEE - Regional Actuarial Insurance Conference".




FIAR 2018 - Motor Insurance Conference (I & II): with the right use of technoloogy, clients' expectations and MTPL insurer's profitability may go hand in hand

The first and second parts of the Motor Insurance Conference taking place at FIAR 2018 focused on the new MTPL Law in Romania and the way it changed the market after almost 1 year of implementation, as well as the consequences of the new legislative framework and the operational challenges this brings, but also the most suitable solutions for balancing regulation, insurers' appetites and customer expectations on the MTPL market.


FIAR 2018: Brokers' Conference (II): digitization and technology are needed for efficient operations, but will not replace the human touch in consultancy

The second part of the Brokers' Conference taking place at FIAR 2018 analyzed the impact of European Union's legislative overhaul - IDD & GDPR -, also bringing into debate study cases and real-life scenarios of what the brokers face on the market, and, last but not least, trying to see whether digitization and InsurTech could truly lead to disintermediation.


Brokers' Conference (I): Until 1 July, when we will see the final version of the IDD, we cannot say for certain if we are ready and how ready we actually are

The second day of debates at FIAR 2018 started with The Brokers' Conference, the event dedicated to the mediation market in Romania and in the CEE region. The first part of the conference focused on a market overview and also analyzed the challenges of the IDD implementation, as well as the potential impact of IPID for MTPL and PAD.


INSURANCE IN A DIGITAL WORLD Conference: capacity, consistency and culture are the three key success factors in the digital transformation of insurers

The INSURANCE IN A DIGITAL WORLD Conference, taking place at FIAR 2018, brought into debate the impact of digitization on the insurance industry. The first part of the conference focused on risks & opportunities of digitalization for both industry and consumers, as well as case studies and best practices: BigData & IoT, BlockChain, Peer-to-Peer, and AI.


Insurance Market Trends Conference (II): GDPR and IDD, European regulations affecting all business lines, as well as the compliance with the Solvency II framework, are the main challenges ahead for the Romanian market

During the second part of the Insurance Market Trends Conference, taking place at FIAR 2018, the debates focused on the current situation in Romania and the sustainable development for a growing and stable insurance market, as well as the challenges and opportunities for the local insurers.


See all