STATISTICS:

NATIONAL BANK OF SERBIA
Insurance Supervision Department

XPRIMM: How do you comment on the 2016 overall results of the insurance market in your country? What are the main trends recorded during the period?
NBS:
Developments in the Serbian insurance market indicate positive trends. Insurance sector maintained its position as the second most important segment of the Serbian financial market increasing its share of the financial sector's balance sheet total. Capital adequacy, measured by Solvency I ratio, was very good in both non-life (217.0%) and life (244.7%) segment of the market. Last year was also a very profitable one, both for non-life (RoE of 12.9%) and life (RoE of 9.9%). Positive premium development continued in 2016. at a rate of 10.1% y-o-y driven mainly by positive developments in the life premium segment.

XPRIMM: What are your expectations for the current year's results?
NBS:
There is a lot of catchup potential of the domestic insurance market, having in mind the level of its development compared the EU average. We can expect to see a continuation of positive premium developments coupled by a healthy increase of technical provisions. This should translate into sufficient capital adequacy and a continuation of positive trends in profitability, provided that cost pressures are kept in check.

XPRIMM: Has the market seen any legal changes of some relevance in 2016? Are any in preparation for the near future?
NBS:
Last year was dominated by alignment of operations of market participants with the requirements of the new Insurance Law. This year, the most important legal change has been an amendment of the National bank of Serbia's Decision on technical provisions in April 2017. In line with the developments in other European markets and a strong decrease in the yields on Serbian long-term government bonds, we have cut the technical interest rate for the calculation of mathematical provision from 3.0% to 2.25% for euro denominated life insurance products. This change will affect contracts concluded from August this year onwards. We expect insurance companies to adjust their product offerings before this date without any problems and we will continue to closely monitor ALM risks in the life insurance market.

XPRIMM: As the statistical data show, a significant increase was seen both in the GWP and in the indemnities paid for life insurance in 2016. Can you please provide more details on this trend? Which were the main growth drivers?
NBS:
Life insurance is the most dynamic segment of the Serbian insurance market. It recorded a 19.4% growth rate to reach premium share of 25.9% for the first time. This segment of the market shows signs of maturing evident in significant increase of payouts to beneficiaries while still maintaining double digit premium growth. Diversification of life insurance products is increasing as can be observed in the prominence of bank assurance and pure endowment products, as well as introduction of group life policies and unit-linked products.

XPRIMM: Please comment on the MTPL market evolution - trends, profitability, evolution of the average premium and average claim values etc.
NBS:
MTPL, as a compulsory line for 2.4 million vehicles, maintains the first place in the Serbian insurance market with a share of 34.0% in the total premium, down slightly compared to previous year. MTPL recorded modest premium increase of 4.3% y-o-y after a strong increase in premium in the previous period. 10 insurance companies offer cover with an average premium of little over a hundred euros, which has been stable for some time, with a slight increase of the rate of claim settlement.

XPRIMM: Are there any changes to be expected for 2017 in the market's structure? (privatizations, other M&A operations etc)
NBS:
Serbian insurance market is dominated by subsidiaries of EU insurance groups which have a share of 77.0% in the balance sheet total. Having this in mind, the number and the structure of market participants has been influenced by global strategies of insurance groups present in the Serbian market and the region. This year we expect the merger of two former subsidiaries of Axa with a local subsidiary of Vienna Insurance Group, as a part of a regional deal between these two groups. No other plans and developments have been announced so far.

Related articles

photodune-3834701-laughing-girl-xs

William VIDONJA: The sky is going to fall on insurers, intermediaries and consumers

"The sky is going to fall soon on the insurers, intermediaries and consumers in Europe", believes William VIDONJA, Head of Conduct of Business, Insurance Europe, referring to EU regulation.
In this regard, he stressed out the new features of the IDD (insurance distribution directive), PRIIPs (related to investment-based insurance products) and Solvency II Directive.

2016-09-29

ON THE MOVE

Swiss Re appoints new CFO and proposes new members to the BoD

Swiss Re announced that John DACEY, currently Group Chief Strategy Officer, is appointed Group Chief Financial Officer, effective 1 April 2018. He succeeds to David COLE, who will step down to pursue a non-executive career, while remaining a board member of several Swiss Re subsidiaries.

Piotr OZAREK is the PZU's first Ombudsman

Piotr OZAREK was appointed to perform the newly established function within PZU, as the first client's spokesperson of the insurer. His main task will be of helping in the most difficult and complicated cases in which PZU's clients are not satisfied with the solution.

Desmond BOHAN joins JLT Re as Senior Vice President

JLT Re, part of the global provider of reinsurance broking and consultancy, has appointed Desmond BOHAN as Senior Vice President in Stamford, Connecticut. He will focus on the continued expansion and development of JLT Re's Program practice in North America.

TOP EVENT

"Insurance and Pensions reloaded" - the 7th EIOPA Annual Conference

The 7th EIOPA Annual Conference takes place today in Frankfurt am Main, Germany. A review of the current supervisory covergence issues and of the prospects of the Pan European Personal Pension Product are on the event's agenda, together with analyzing the ways in which regulation may enable innovation.

22.11.2017

photodune-3834701-laughing-girl-xs

"IIF2017 - Insurance in the DIGITAL World" Conference took place in Vienna

"IIF2017 - Insurance in the DIGITAL World" conference brought together in Vienna well-known insurance professionals from all over the world who analyzed the latest digital trends in the industry, taking into account the fast digitalization of the financial services providers' world, in particular in the insurance field, which is creating both huge opportunities and strong challenges for the players.

14.11.2017

photodune-3834701-laughing-girl-xs

Croatian Insurance Days Live

On 9 November has started in Opatija, Croatia, the 2017 edition of the Croatian Insurance Days Conference, the traditional meeting of the Croatian insurance top professionals with their European peers. XPRIMM Publications are supporting the event as Media Partners.

09.11.2017

photodune-3834701-laughing-girl-xs

The 2017 Baden Baden Meeting: Short recap

The Baden-Baden meeting, one of the key events in the reinsurance calendar, has just set the final point of this year's edition. XPRIMM Publications have reported from the meeting's premises. Let's recap!

26.10.2017

Baden Baden Headlines 3: CEE insurance markets are attractive for reinsurers

Central and Eastern Europe insurance markets are an important source of business for Lloyds, total premium income from this region increasing by EUR 64 million since 2010, pointed out the Lloyd's representative in a seminar dedicated to CEE insurance markets: "We are seeing strong growth from Czech Rep, Poland, Slovakia and Ukraine. At the same time are some contractions from Russia, Bulgaria, Romania and Hungary due to challenging trading conditions as political implications and other sanctions".

25.10.2017

Baden Baden Headlines 2: cyber insurance market set to grow under regulatory presure; nat cat events more frequent, but losses per event are decreasing

Asian insurance market, especially the Indian market - are considered to be "the new El-Dorado" of the global re/insurance market, with rapidly expanding markets and an dynamic environment: "Indian P&C re/insurance markets are expected to grow at a pace of 15% per annum", according  to Victor PEIGNET, CEO, Global P&C, SCOR SE. The French -based reinsurer setted-up its Indian branch in 2016, after the authorisation from the local market authority - IRDAI. India's re/insurance market has become more attractive for global companies following the relaxation of regulatory requirements, and lately, "big names" in the industry entered the market by opening branches: GEN Re, SCOR, Lloyd's of London, MUNICH Re, SWISS Re, Reinsurance Group of America (RGA), HANNOVER Re, XL Catlin and others.

24.10.2017

See all