It is worth noting that although the GWP increase was a rather modest one, the market profitability improved at a much higher rate. "In the first half of 2018, the insurance sector made profit before tax in the amount of MKD 250.34 million (~EUR 4.07 million). Compared with the first half of 2017, the profitability of the insurance companies increased by 147.52% (1H2017: MKD 169.70 million; ~EUR 2.75 million),"said Mr. Klime POPOSKI, the head of the Macedonian FSA.
The motor insurance business saw a positive trend, with increasing GWP volumes on both LoBs, Motor Hull, and MTPL. It is worth noting that for the MTPL line, despite claims payments increasing at a significantly higher pace compared with GWP growth (9.12% vs. 6.07%), the market efficiency indicators have improved: "The combined coefficient for MTPL in 1H2018 is 88.13%, compared to 1H2017 when it was 90.09%," explained POPOSKI. Yet, "at this point, there are no signals for the liberalization of the MTPL insurance market," meaning that the most expected, but also most "feared" change in the market to come is still not a matter of strict actuality.
The property insurance lines saw divergent trends: while GWP for fire insurance went up by over 23% y-o-y, the damages to property line volume of premiums has decreased by 1.5% y-o-y. "This year (2018) we had more frequent floods, hailstorms, and early frosts to which agriculture was primarily exposed," said POPOSKI, but, "the insurance sector compensates a very small segment of the catastrophic risks total costs." In fact, although paid claims for property insurance increased by an impressive 77% y-o-y, total claims paid by the Macedonian insurers for these lines of business didn't exceed EUR 3.7 million. Overall, the protection gap remains very large,
As far as the expectations for year end are concerned, POPOSKI said: "I believe that the positive trend will continue and that the insurance sector will grow in both segments of insurance and that the same trend will continue from the first half-year."
Access www.xprimm.com and download the 1H2018 Macedonian insurance market statistics.