Serbian reinsurance market may be liberalized soon

3 October 2013 — Daniela GHETU
serbia3Gross premium written by the four Serbian reinsurance companies amounted to a total of RSD 8 billion (EUR 77 million) in 2012, almost 11% up as compared with the previous year. "Dunav Re, which is owned by the state-owned direct insurer DUNAV, is the leading reinsurer with a market share of 38,21% in 2012. WIENER Re, owned by Prague based VIG Re, is holding a market share of 36.78%," told xprimm, Vidan SLANA, CEO WIENER Re a.d.o. Beograd, member of the Vienna Insurance Group.

"DUNAV used to act as the major reinsurer in Serbia having a market share of more than 70% only a few years back. Over the last three years, WIENER Re has become an aggressive competitor for both Serbian and neighbouring country business, and has succeeded in attracting a number of accounts from DUNAV Re.," explained him.

Most of the reinsurance premiums comes from property risks. Direct insurers as well as local reinsurers are obliged to have a retention on risks or treaties before reinsuring or retroceding, however, local retention is rather modest when it comes to large risks and high treaty capacities, especially once with Nat Cat covers. Second larges class of business is Motor reinsurance. Most direct insurers reinsure MTPL on a non-proportional basis, including Green Card, which is mainly reinsured through a national reinsurance scheme run by the Association of Serbian Insurance companies and reinsured by DUNAV Re and WIENER Re together. Some of the direct insurers have group covers. Casco business is reinsured mainly on Quota Share bases.

According to current legislation in Serbia, both inwards and outwards reinsurance may only be transacted by authorised domestic reinsurance companies. As a result of this legal restriction, in order to approach the international reinsurance markets, Insurance companies need to cede through either a local reinsurer or to establish their own reinsurance subsidiaries.

There are four reinsurers, DUNAV Re, WIENER Re, DELTA GENERALI Re and DDOR Re. Both DUNAV Re and WIENER Re are market reinsurers and the two other companies use their reinsurance licences only for retroceding parent company business abroad.

"According to a draft of a new insurance law which should be presented to parliament, the domestic reinsurance market will be liberalised after Serbia joins the World Trade Organisation. It is unknown whether this draft will remain in the present form and when it will be adopted and verified by the parliament," Vidan SLANA explained for xprimm.

You may read an extended report on the Serbian's reinsurance market current status and perspective in the first edition of Insurance Report Serbia, to be officially launched on October 20th, on the occasion of the XPRIMM Reception in Baden-Baden.

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