Top insurers in SEE pocket hefty profits, premium growth lags

By Nevena Krasteva

Southeast Europe’s return to steady growth, though slow to affect the insurers in the region, is eventually showing in their balance sheets. In the merciful absence of natural disasters or major external shocks and amid rising consumption and a favourable fiscal environment, the positive trends that had emerged already in 2014 resulted in a 6% increase of the combined gross written premiums (GWP) of the 100 biggest insurers, and, more notably, a 43% growth of their combined net profit.

Croatian insurers in particular put up a remarkable performance and overtook the ranking, as Croatia Osiguranje, the region’s second biggest insurer, saw an impressive turnaround to profit.

The prospects before the SEE insurance industry remain even more optimistic as the positive business environment and conditions for convergence towards the markets of other EU countries are expected to persist. Furthermore, the region is largely seen as relatively underdeveloped and therefore holding untapped potential.

In 2015, the combined GWP of the region’s top 100 insurers rose to 6.8 billion euro from 6.4 billion euro of the entrants in the previous year’s ranking. Still, about a quarter reported a decline in their GWP versus just 11 a year earlier.

The combined net profit of the region’s top insurers, however, leapt to 234 million euro from 163 million euro a year earlier and a revised loss of 137.5 million euro booked collectively by the entrants in the 2013 ranking.

Ljubljana-based Zavarovalnica Triglav, the top insurer for yet another year, posted 586.3 million euro in GWP, as compared to 592.6 million euro a year earlier. It was also the top performer in terms of net profit earned in 2015 with 58.5 million euro versus 45.6 million euro and way ahead of the rest.

In 2015, Triglav Group acquired Skupna pokojninska druzba, the second largest provider of supplemental pension insurance on the Slovenian market, which is one of the factors that significantly boosted its financial results along with a premium growth in markets outside Slovenia and the absence of mass loss events. At the end of 2015, Triglav held a market share of 44% in non-life insurance, 35% in life insurance and 23% in health insurance. Going forward, in the six countries in SEE where it operates, Triglav Group’s focus will be on health and life insurance, with special attention to innovative telematics solutions. (You can read an interview with Benjamin Josar, member of the management board, on the next pages).

The only changes in the top 10 spots in the 2015 edition of the TOP 100 insurers ranking were a switch of places between Croatia Osiguranje and Adriatic Slovenica, as well as the entry of Serbia’s Dunav Osiguranje at no. 8 and of Euroins Romania Asigurare Reasigurare at no. 10. They replaced Croatia’s Allianz Zagreb and Romania’s Astra.

At no. 2, Croatia Osiguranje saw its GWP edge up 3.2% to 301.4 million, whereas the third placed Adriatic Slovenica recorded GWP of 296.6 million euro, down from 297.9 million euro a year earlier.

Furthermore, the Croatian insurer swung to a net profit of 6.1 million euro from a loss of 53.9 million euro after completing the first stage of a restructuring process. The company has said that its continued transformation towards long-term sustainability and the preservation and strengthening of its market position will be focused on further development of products, services and its availability to existing and future customers and on improving business efficiency and reducing costs.

Croatia Osiguarnje’s strong performance came on a very active domestic market which returned to growth, albeit slight, after a decline a year earlier. This positive development, however, was not reflected in the number of Croatian entrants in the ranking, which dropped by one from a year earlier, to 14.

Interestingly, the second place in the ranking in terms of profit was taken by Romania’s Metropolitan Life Asigurari, otherwise 39th in terms of GWP, with a net result of 39.4 million euro. It was followed by Slovenia’s Zavarovalnica Maribor with a net profit of 24 million euro.

A total of eight new entrants made it into the ranking as one – Bulgaria’s Dall Bogg Zhivot I Zdrave – booked a startling 848% jump in GWP to 438,000 euro.

On the opposite end of the table, Romania’s Astra, which is in bankruptcy, posted the biggest decline in GWP, by 43% to 97.4 million euro.