STATISTICS: BiH, 1H2018: solid business growth despite challenging legal inconsistencies

The Bosnian market saw a consolidated GWP growth rate of 4% y-o-y in 1H2018, to EUR 183.5 million. Of this total, the non-life insurance segment accounts for by far the largest part with over 80%. Moreover, the MTPL insurance class provides for a clear half of the total GWP volume.

Yet the MTPL class is not only the main business generator, but also the theater of most challenges. One of the most difficult issues is related to the federative structure of the Bosnian market and the inconsistencies between the regulations governing the insurance markets of the two administrative entities: Republic of Srpska (RS) and the Federation of Bosnia and Herzegovina (FBiH). Emina JAHIC explained to us that "while the Law on Obligatory Traffic Insurance has been effective in RS from October 2015, FBiH has not yet adopted a new, similar law". Also, given that the market is not liberalized, MTPL prices are established based on the basic premium. Recently, the Insurance Agency of RS decided to lower the basic premium by 10%, "which will certainly cause market disturbances in both insurance company business operations and the equal market conditions for all participants, which is the main AZOBIH competence." The forthcoming tariffs liberalization process will for sure add to the market turbulence.

One should also note that, despite the high exposure of the country to extreme weather events, the property insurance business is declining. "This year's exceptionally rainy weather caused the producers and farmers to suffer huge losses. The economic situation in the country is not the best and citizens do not think insurance is a necessity, but a luxury. Since it is one of the riskiest forms of insurance, premiums are extremely high, premiums covering the risk of loss caused by weather issues remain unattainable for many in the population and farmers. On the other hand, the role of the state in creating a strategy for risk prevention from extreme weather conditions and the involvement of insurance companies in preventing large losses is still not recognized to the right degree," commented Emina JAHIC.

Access www.xprimm.com and download the 1H2018 Bosnia-Herzegovina insurance market statistics.

Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles

ON THE MOVE

Peter CLARKE named VP & COO of FAIRFAX

FAIRFAX Financial Holdings Limited announced that Peter CLARKE has been appointed Vice President (VP) and Chief Operating Officer (COO) of FAIRFAX, reporting to FAIRFAX President, Paul RIVETT.

12.02.2019

ERGO Group appoints a Polish manager

Adam ROMAN, board member of Ergo Hestia (Poland), will hold the position of Head of Global P&C of the ERGO group, effective 1 March. His tasks will include supervision over property insurance of the group in the areas of underwriting, actuarial and pricing, as well as reinsurance.

07.02.2019

TOP EVENT

Inclusive Insurance - a creative solution to narrow the protection gap in the emerging markets of the Southeastern Europe

Insurance should be accessible to all social classes, regardless of their wealth & income status. Products offered today are conventional insurance products, largely inspired from the developed markets as "one-size-fits-all" solutions, affordable to only middle- and high-income clients in the Eastern Europe's emerging & developing markets. Inclusive insurance's goal is making insurance available to all, with responsible insurance offers, thus making up for a solution to narrow the insurance coverage gap in the region.

14.02.2019

Latest trends and challenges in the property and motor insurance lines under scrutiny, in Vienna

Property and motor insurance lines are providing for about 75% of the non-life insurance business in the CEE region, but are responsible for over 77% of the claims expenses. As such, although other classes of risks are emerging, for the time being and most probably for a rather long period ahead, property and motor insurance lines will continue to be at the heart of CEE's insurance market architecture.

14.02.2019

FIAR 2019: Register before 28 February and save EUR 400 of the attendance fee

To the satisfaction of its traditional guests, FIAR returns in 2019 to its historical hometown, Sinaia. The forthcoming edition will benefit from the comfort and professional facilities of a new venue, the Conference Center of the International Hotel ****, located in the heart of the beautiful mountain resort. Registration is opened at a significantly discounted early bird rate until 28 February.

10.01.2019

See all