There is a lot of catchup potential of the Serbian insurance market, having in mind the level of its development compared the EU average. We can expect to see a continuation of positive premium developments coupled by a healthy increase of technical provisions. This should translate into sufficient capital adequacy and a continuation of positive trends in profitability, provided that cost pressures are kept in check.
There is a tendency to withdraw from insurance business, both on the foreign investors side and on domestic owned companies. In case of the national companies the trend is more connected with obvious or provoked bankruptcies, while for foreign investors turning off Ukrainian business was caused by the high level of sovereign risk, low rates of economic recovery, insignificant (or even negative) return on capital, etc.
Deeper financial integration will need to be accompanied by increased convergence of supervisory outcomes across the EU and necessary adjustments to strengthen the supervisory framework in order to ensure that the capacity to supervise and manage risks keeps pace, in particular in cross-border and critical areas.
Slowing economic growth, continued pressure on pricing, emerging risks (e.g. Cyber hacking) and regulatory changes such as Solvency II in Europe, C-ROSS in China, IRDA in India, and new South African regulations are some of the main challenges we face. Understanding the challenges of reinsurance activity in the CEE also means understanding what stakeholders perceive, what they want, and meeting these expectations.
The supervisory authority pays attention to the process of automation, digitizing, the creation of databases and on-line services in order to improve the quality of customer service and, last but not least the reduction of the level of fraud not only among unscrupulous customers, but also in the case of insurance agents. A similar database has already been created for the MTPL segment and it will be useful for insurers to promote the voluntary types of insurance.
We expect that 2017 will be a better year towards the performance and expansion of the insurance market, the increasing of transparency and trust of the consumers, the fostering and diversification of insurance products, as well as towards the strengthening of inter-institutional cooperation, to promote exchange of experiences in terms of the regulation and stabilization of the market.
In 2016, we have seen a progress on the health insurance line, which is a relatively new insurance product in Macedonia, with modest beginnings in 2013. Last year also brought a boom in unit-linked insurance, also a product only existing in the market since 2015.
We have no interest to be number 1 in Romania in a mid-term, neither on life nor non-life sectors, and that's not our target. I want us to be a profitable company and the best choice for brokers. That's our target: to be the best in class.
Young buyers don't care if the insurance company has been in business
for a hundred years. They don't care if the company has a multibillion
dollar balance sheet or not. They are spoiled by an entirely different
level of customer experience. People who buy products from Apple or
people who go to Starbucks have a different expectation of what they get
for the money they spend. They want something different, they want
something better. And it's hard for legacy companies to adjust. It's
hard from the change of computer systems, it's hard from the change of
their attitudes ... but however, traditional carriers will have to
adjust in the future so it is tough for legacy companies.
EUROINS Insurance Group operates in 7 European countries and is a
well-recognized brand in 4 of them: Bulgaria, Romania, Macedonia and the
Ukraine. Our market share in Romania is almost 15%, in Bulgaria - about
7% and in Macedonia - 9%. As part of its international growth, EIG will
expand its operations further within the CEE and SEE countries and
continue to consolidate its position in the region and to develop itself
as the leading independent insurance group in the region.
We work in a business which is arguably one of the more exciting ones at
this moment in time. It really does have everything to play for and is
in the midst of some pretty fundamental changes.
Telematics has been
and will continue to be a game-changer. This trend is now expanding
with demotics, which is capturing the so-called 'Internet of Things'
within home connectivity. It's an interesting area in rapid development.
Our strategy remains unchanged - we want to focus our efforts on the non-motor segment, which ensures our stability, and we want to increase the retail business in our portfolio. However, in a market dominated by motor insurance, you must also take this segment into account. Generali Romania is growing on motor while carefully monitoring profitability indicators.
Turkish market remains to be our major operating market and MILLI Re aims to continue its leadership of the market. On the other hand, as part of the strategy of transforming from a local reinsurance leader into an international player, MILLI Re has actively engaged in accepting business from emerging markets including Middle East, Asia, Northern and Continental Africa, CIS and Eastern Europe as well as from some developed markets such as Continental Europe and Lloyd's