Sigal Uniqa Group Austria sees unused growth opportunities in voluntary insurance and online sales

Sigal Uniqa Group Austria, part of Vienna-based Uniqa Insurance Group, consists of seven insurance companies and a private pension fund operating in Albania, Kosovo and North Macedonia.

Avni Ponari, Sigal Uniqa Group Austria (Albania, Kosovo, North Macedonia) CEO

Sigal Uniqa booked an increase in gross written premiums in the three markets where it operates in 2018. On which market segments do you see highest growth and where do see untapped potential?

2018 has been a positive and successful year for Sigal Uniqa Group Austria thanks to the company’s strategy to meet customer requirements and its adoption of digital technologies. Sigal Uniqa Group Austria is a regional insurance group, consisting of seven insurance companies (life, non-life and reinsurance) and a private pension fund, which operate successfully in Albania, Kosovo and North Macedonia. Sigal Uniqa has been a leader in the Albanian insurance market since 2002, with an average market share of 30%. Since 2007 Sigal Uniqa is part of the financial giant Uniqa Insurance Group, which is one of the leading groups in the markets of Austria and Central and Eastern Europe, with approximately 19,000 employees and exclusive sales partners serving over 10.1 million customers in 16 countries.

In 2018, Sigal Uniqa saw its highest growth in the non-life insurance segment, where it generated approximately 56 million euro in gross premiums, which translates into a rise of about 10% as compared to 2017. This increase is the result of the clear vision of the top management and dedication of the employees to deliver high-quality customer service and products that meet market demand.

If we compare the per capita insurance densities of Albania (35 euro), Kosovo (43 euro) and North Macedonia (65 euro) with other Southeast European countries, we see a very large difference that shows untapped potential. In the three countries
where Sigal Uniqa operates, approximately 50% of the insurance policies that are being purchased are compulsory, mainly motor insurance. This shows that we have the potential to increase sales in the voluntary life, health and property insurance segments. Given that Albania is part of a seismic zone and that it has had uncontrolled construction over the years, as well as the fact that the public healthcare system is overloaded and outdated, the potential of property and private health insurance is encouraging.

Furthermore, Sigal Uniqa is strongly promoting the online purchase of insurance products to reach untapped potential. This provides the client with simplified procedures and 24/7 availability from any location.

I also see long-term untapped potential with regard to private pensions in Albania.
The problems that the state pension sys tem faces, especially the increasing financial deficits of the state-run schemes resulting from the rates at which the elderly population is growing, and the expectations for an increase in life expectancy and a drop in birth rates require the urgent development of the private pension market in Albania. Such development would require focusing on finding the appropriate ways and the right financing model through which the individual and the state would share the responsibility for covering the needs of the elderly people. With the development of this market and the inclusion of private pensions as a mandatory financial support option for the Albanian people, security for the future of the elderly people would increase.

What major regulatory or other challenges do you face on the markets where you operate?

Insurance companies with their taxes and well-organised financial system constitute one of the main pillars of the financial system as they are major contributors to the Treasury. However, the Albanian state policies could be more supportive of insurance companies, as seen in a comparison with the other European countries. The successful operation of Albania’s private pension schemes requires, among other things, to put in place at this early stage the driving factors for their creation and proper functioning. In this context, the role of the state, as the main regulator in the economic field, is to make the development of private pension schemes more attractive through the application of fiscal facilities not only for the entities involved in this type of financial activities, but also for the beneficiaries of these schemes. All over the world, where alternate systems are applied, fiscal incentives exist. Adoption of European laws on private pension contributions would help develop private pension funds and ease the state budget obligations for future pension payments.

Clients in the insurance markets where we operate (Albania, Kosovo & North Macedonia) have emerged from a communist system and are not used to taking financial responsibility in the event of a disaster as it was the state that used to pay off or offer free services when disasters occurred. This mentality is fading with time, but it will continue to have an impact until the old generation is re
placed by a new one which realises that a secure future can be achieved only with the help of private insurance.

Thus, the biggest challenge facing insurance companies is to reinforce their credibility and to inform people of the potential benefits that they can have in the event of a disaster by serving them with dedication and being a good example in how to deal with insured clients in cases of accident.

What are your expectations regarding Sigal Uniqa’s financial performance in 2019?

Being a market leader since 2002 has its advantages and disadvantages, as our strong and positive image puts us in a favourable position when it comes to customers’ choice, yet we have the responsibility to meet innovative and dynamic market demands. We are happy to have held the leading position all these years and we assure you that we are ready and well-prepared to successfully advance further in 2019 as well.

Sigal Uniqa is always focused on meeting customer needs, developing services and diversifying online sales channels through its website and mobile application, and expanding its sales network across the group’s markets. Our company is investing every day to educate the younger generation about our digital platforms. Online insurance sales platforms are an investment for the younger generation.

What are your main short and medium-term goals on the markets where you operate?

Our short-term goal is to maintain a leading position in Albania’s insurance market and to advance in the insurance markets of Kosovo and North Macedonia. We are committed to train our staff in the most modern practices within the Uniqa Insurance Group and to deliver high-quality European products and services.

In the short term, we aim to increase voluntary insurance sales, as mentioned above, as they would provide security for the future of the individual and will have a positive impact on the development of the country’s economy.

Our medium-term goal is to inform the next generation about insurance products and the benefits they provide in guaranteeing a less stressful, better-quality, life.

For this reason, we have organised several meetings at the Insurance Association of Albania with all insurance companies in the country to find methods to test the information that young people have on insurance products and to discuss how we can equip them with the right information for a safer future. We often publish information raising awareness of insurance on social media, news portals, newspapers and television. We have organised competitions in universities to select the best student ideas for innovative insurance products or services. We are also offering students opportunities for internships at our company.

Another medium-term goal that we have is to help develop the insurance market in the region, improve insurance culture, raise awareness of the need for insurance, add new insurance products tailored to customer requirements, and increase private pension contributions, hoping that the Albanian government will truly understand the importance of liberalising the pension contribution system and continue to adopt the pension legislation that is in force in developed countries.

Our goal is to help develop the insurance market in the region, raise awareness of the need for insurance, add new products, and increase private pension contributions