For the end of 2017 we expect that the positive trend in both life and
non-life insurance will continue, with an emphasized trend of increasing
the Unit-link life insurance and reducing the relative participation of
the insurance brokers in the intermediation.
Technology and digitization are the most important drivers to close the protection gap for agriculture in developing countries. As in developing countries agriculture is often small-scale, it needs technology to design and sell insurance products in an efficient way.
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 Romanian insurance market went through a rough period, marked by
several changes in legislation, especially on the MTPL segment, a field
of business which is now, for the time time, regulated by a dedicated
law. Although still contested in some aspects, the new Law sets up the
premises for a better predictability, fair pricing ane better consumer
Microinsurance helps with financial education, family planning,
development of small enterprises and maintenance of health, and the
products are typically designed to address the specific needs of any
given population. A virtuous cycle develops as this produces income
smoothing, larger planning horizons and the development of financial
wellbeing. It is challenging because, to be affordable, scale must be
We currently expect the immediate impact of digitalization to be on sales, with an increased ability to reach clients and offer cross-selling of products. Data could be pre-filled, which is likely to increase sales conversions. The full benefits of digitalization however will depend on the extent to which data owners are able to make use of their data, including sharing it with other parties.
One of the most discussed subjects in our market, in 2016 was the transfer of the road accident claims settlement activity from the independent evaluators to the insurance companies. Despite the surge in negative expectations, the measure resulted in an effective direct, non-intermediated interaction between insurers and their clients which led to the growing customer satisfaction with regard to the claims payment. In KOMMESK-OMIR case, in 2016, the level of satisfaction with the claims payments reached to 91%, while the quality of the settlement of losses was 90%.
We applied for membership to the Green Card international insurance system in the beginning of 2016 and are currently working in this direction. We have not yet summarized the results of the analysis of Green Card contracts' tariffs, but I do not see any bases for significant change.
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.