The two earthquakes experienced by Croatians last year, when many of them had to bear the losses of their pocket in the absence of an insurance policy, seem to have finally raised awareness of the need for earthquake protection, leading to a visible increase in demand for such policies.

"We see a large increase in private policies as a trend for the whole industry," recently stated Robert VUCKOVIC, Member in the Management Board, CROATIA Osiguranje, Croatia's top insurer, quoted by Bloomberg. In January, coverage is estimated to have doubled y-o-y, while already the 2020 end-year figures showed an increase both in the number of policies sold and GWP for this type of insurance.

Unfortunately, last year showed very directly the importance of earthquake insurance - with the total damage in the earthquake that hit Zagreb and Zagreb County in March, estimated at HRK 86 billion, only a small part of the damage is covered by insurance, for which insurers are already paid off a large portion. In 2020, insurers paid out, cumulatively, HRK 247.9 million, and it is estimated that an additional HRK 150 million will be paid in the name of damages caused by the Zagreb earthquake, an informative material provided by the Croatian Insurance Bureau (HUO) shows. The earthquake that hit Petrinja, Sisak, Glina and the surrounding area in December will add to these figures, as there are several hundred reported damages from the Sisak-Moslavina County, while additional damages are expected in the coming weeks, HUO said.

However, as HUO has repeatedly warned, despite last year's increase, the coverage for NatCat risks at national level is still low in Croatia, especially in what residential buildings are concerned. The HUO statistics show that in comparison with the EU average annual spending for housing insurance, of EUR 174, Croatian homeowners are not spending more than EUR 51 per year to get protection against the risks to their property.

By the end of 2020, GWP for class 8, that includes also protection for NatCat risks, went up by 6.8%, while the number of policies sold increased by 5.3%. At the same time, paid claims for the same line of business increased by 69.6%, reaching a historic peak, while the number of claim files went up by 21,8% or some 7,000 in absolute terms. The average claim value went by almost 40%.

The damage of the Zagreb quake was estimated last month by the Economy Ministry at HRK 86 billion, or about 60% of the annual budget of the country of 4.2 million people, Bloomberg wrote. Yet, only 7,300 insurance claims were filed, and insurers will eventually have paid about HRK 400 million in damage, a fraction of the total cost.

The plan is to rebuild Zagreb mostly with state and regional government funds, helped by EUR 683.7 million in special EU assistance. The government of Prime Minister Andrej Plenkovic will also finance the entire cost of rebuilding the region shaken in December, among the poorest in the country.