XPRIMM: How would you generally comment on the insurance market's evolution during the first part of 2017?
Petar-Pierre MATEK: Overall, we can say that there are signs of recovery on the Croatian insurance market. Premium growth in 1H2017 was 2.7% in total (3.8% in non-life and 0.4% in life insurance) in comparison with the same period last year. The structure of the premium did not significantly change in comparison with the same period last year (1H2016), non-life share is 69% and life 31%.

In non-life, an insurance line that is still dominant is MTPL with a share of 31%. In life, traditional insurance is still the most significant line with a share of 75% (in comparison with 1H 2016 when it was 80%). Decrease of that share is a result of the growth in unit-linked business, predominantly single premium. Unit-linked premium increased 32,9% (in comparison with 1H 2016), while compared to 1H 2015 the increase was 93,8%. The main reason for that is a low interest rates environment and strong bancassurance sales channel.

XPRIMM: Are there any significant changes in your market's structure?
Petar-Pierre MATEK: There are no significant changes; we had two mergers in the first half of the year within same insurance group and one change in ownership.

XPRIMM: As far as we know, the MTPL line saw some changes in legislation, with regard to the pricing criteria. Please comment on the MTPL market evolution - main changes and their impact on GWP and profitability.
Petar-Pierre MATEK: According to the Act on Compulsory Insurance within the Transport Sector, insurance undertakings are obliged to form insurance premiums sufficient to cover all future claims and expenses. In line with that, the supervisory body performs continuous supervisions of MTPL business and, if necessary, issues measures instructing the insurance undertakings to fulfill the above-mentioned conditions. As a result of these actions, GWP and profitability of MTPL business have stabilized compared to the previous year.

XPRIMM: Your country has suffered from the strong heat wave and the subsequent extreme weather events that hit this summer large areas of Europe. How large were economic losses and for how much account the insured losses from the total?
Petar-Pierre MATEK: Official data about economic losses caused by the heatwave aren't available yet, but we don't expect a significant amount of insured losses, taking into account low insurance penetration in Croatia and the publicly available information's.

XPRIMM: How do you comment on the Nat Cat insurance coverage degree in your country? Is your government taking action to improve the Nat Cat protection?
Petar-Pierre MATEK: Low Nat Cat insurance coverage degree in Croatia is mostly caused by low risk awareness among population and partly by intervention policy in place. The protection from natural disasters in Croatia is regulated by the Act on Protection from Natural Disasters and a series of accompanying subordinate regulations. The system of financial assistance is implemented at the level of local self-government, regional self-government.

The government is also taking actions towards improving financial literacy, raising the awareness regarding risk and potential cover and co-financing of premium for crop insurance. Unfortunately so far there have been no major effects. 

XPRIMM: Please describe in short the insurance brokers' business status in your country.
Petar-Pierre MATEK: Brokers are not one of the dominant sales channels in Croatia - market share of insurance brokers' business in 2016 was 9%, but it has been showing a slight increase in recent years. Besides property and liability insurance, brokers are more popular in large risk insurance lines with a small share in market premium, such as transport, aviation, suretyship, insurance of railway locomotives and rolling stock.

XPRIMM: Considering the market results recorded in the first half of the year, what are your expectations for the year-end?
Petar-Pierre MATEK: We expect that growth from 1H will remain more or less the same until the end of the year in non-life, and slightly higher in life because traditionally on our market there are more premium written during December.