BiH 1H2013: 4.2% market growth fostered by the life business

3 October 2013 — Daniela GHETU
BiH 1H2013: 4.2% market growth fostered by the life business
bosnia-statisticsThe Bosnian insurance market went up by 4.23%, to almost EUR 132.65 million, in the first half of 2013, primarily as a result of an increase of over 6.36% recorded by its smaller segment, namely the insurers domiciled in the Republika Srpska (RS), according to data published by the Insurance Agency in the Republika Srpska (AZORS). At the same time, the GWP volume reported by the FBiH insurers increased slightly by 3.5% y-o-y, the Insurance Supervisory Agency of the Federation of Bosnia and Herzegovina (NADOS) reported. In absolute terms, it is worth mentioning that half of the additional non-life premium production recorded by the entire Bosnian market in 1H2013 was provided by the RS market, while in the structure of the total premiums, the share of the 12 companies domiciled in FBiH amounted to 74.2% (EUR 98.41 million), while the 11 RS-based companies accounted for the remaining 25.8% (EUR 34.25 million).

The first half of 2013 also brought for the Bosnian market a series of legislative changes, which in part proved unsatisfactory or even worrisome for the insurance companies. Probably the most disputed change is the new Law on Amendments to the Law on the fire and fire fighting in the Federation of Bosnia and Herzegovina. Adopted by the FBiH legislative chamber in a unilateral step, without considering the technical argument of the industry, the new Law provides that insurance companies lie under the obligation to pay a parafiscal tax of 6% of the premiums collected for the "fire and natural perils" insurance line and 1% from the functional insurance premiums, which relates to motor insurance. In addition, insurers have to perform a series of operations by which they make sure that the property meets the fire protection requirements. The local press quotes a number of insurance professionals according to whom, if applied in the current adopted form, the new Law will jeopardize the insurers' financial strength. Moreover, once similar provisions are not applied in Republica Srpska, the insurance market coherence will be significantly affected, insurers domiciled in the two administrative entities which form Bosnia and Herzegovina not benefitting from a level-playing ground on the national market. Also, the adoption of the new Law ignores the legal provisions concerning the legal harmonization among the two administrative entities of BiH, by that being unconstitutional. For the future months it is expected that insurers, through the agency of their professional union, will appeal to the Constitutional Court the enactment of this Law.

Access www.xprimm.com and download the 1H2013 Bosnian insurance market statistics.

BiH insurance market indicators (FBiH and RS insurance markets, added-up):
  • Market portfolio - GWP/Claims/Growth rates
  • Rankings - Total/life/non-life (GWP/Claims/Market shares/Growth rates)
FBiH insurance market indicators:
  • Market portfolio - GWP/Claims/Growth rates
  • Rankings - Total/life/non-life (GWP/Claims/Market shares/Growth rates)
RS insurance market indicators:
  • Market portfolio - GWP/Claims/Growth rates
  • Rankings - Total/life/non-life (GWP/Claims/Market shares/Growth rates)

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