SEE top insurers premiums stay flat despite decline in profit

By Radomir Ralev

The combined net profit of the top 100 insurers in Southeastern Europe (SEE) went down to 476.4 million euro in 2020 from 496.8 million euro in the previous year. About 40% of the insurers in the top 100 list recorded a decline in net profit in an environment of unprecedented challenges caused by the coronavirus crisis and persisting low interest rates. SEE insurers, however, demonstrated resilience as their gross written premiums (GWP) remained unchanged at 8.1 billion euro. Still, nearly half of the entrants in this year’s ranking reported a decline in their GWP, including 14 that posted a double-digit fall.

Ljubljana-based Zavarovalnica Triglav managed to keep its top spot in terms of both GWP and net profit for yet another year, despite a decline in both indicators. Its GWP shrank 1.76% to 647.6 million euro while net profit totalled 58 million euro versus 70.6 million euro in 2019. Net profit, backed by a strong brand and diversified product range, was lower than originally planned but in line with the published interim estimate. It was positively influenced by underwriting discipline, increased business volume and prudent cost management, the company has said. The company expanded its market in Slovenia by 0.4 of a percentage point to 36.5% in 2020.

Romania’s City Insurance ousted Slovenia’s Zavarovalnica Sava from the second spot in the ranking with a GWP of 474 million euro, up 20.66%. City Insurance led the Romanian general insurance market in terms of GWPs in 2020 with a market share of 20.07%. In 2021, however, the country’s financial regulator ASF revoked City Insurance’s licence and started bankruptcy procedures, as its majority owner, Netherlands-based I3CP Holdings, failed to cover a capital increase within the legally prescribed period. The company turned to a 4.9 million euro net loss in 2020 from a 11.9 million euro profit in the previous year. The bankruptcy prompted urgent changes in the country’s legislation related to the Policyholders Guarantee Fund (FGA). FGA will be entitled to make payments to affected customers within 60 days from the date of publication in the Official Gazette of a financial regulator’s decision to withdraw an insurer’s operating licence and begin insolvency procedures. Until now, the fund could start paying customers only after the court had declared an insurer bankrupt. Furthermore, the new legislation raises the maximum guarantee ceiling for an insurance claim to 500,000 lei from 450,000 lei.

Zavarovalnica Sava occupied the third spot in the ranking with GWP of 447 million euro, up 4.27%. In terms of net profit, it ranked second. Its net profit went up 27% to 48.9 million euro, mainly driven by good results in non-life insurance and life insurance in Slovenia, but partly offset by challenging claims experience in international reinsurance markets.

The most dramatic change in the ranking is Slovenia-based Generali Zavarovalnica’s leap to the fourth place from the 28th spot a year earlier, thanks to the acquisition of Adriatic Slovenica. Following the deal, Generali Zavarovalnica quadrupled its GWP to 426.1 million euro in 2020 and became the second biggest insurer in Slovenia with a market share of 16.8%.

Croatia Osiguranje, the market leader in Croatia, fell one spot to the fifth place with a GWP of 363.8 million euro, up 0.11%. The company recorded 5.3 million euro damages from insurance contracts caused by the series of earthquakes recorded in the area of Zagreb in March 2020, the strongest of which being of 5.5 magnitude according to Richter’s scale.

The top 10 ranking was dominated by companies from Slovenia, Romania and Croatia, the only exception being Serbia’s Dunav Osiguranje. The state-controlled Serbian company ranked ninth with a GWP of 253.2 million euro, up 4.45%. Its net profit went up to 27.3 million euro from 25.6 million euro. Dunav Osiguranje saw its share of the total premium income of Serbia’s insurance sector rise to 27.0% at the end of 2020 from 26.4% a year earlier.

Slovenian members of the ranking came first both in terms of GWP and net profit in 2020. Insurers in the country reported a combined GWP of 2.4 billion euro in 2020, equal to 27% of the combined GWP of all 100 members.

Four new entrants made it into the ranking – Grawe Osiguranje Banja Luka, Serbia-based Globos Osiguranje, North Macedonia-based Halk Osiguruvanje and Albania’s Intersig Vienna Insurance Group.

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SEE TOP 100 insurers is a ranking of the largest insurers (excluding re-insurers) in Southeast Europe in terms of gross written premium from non-consolidated income statements for 2020.
To allow comparison, all local currencies have been converted into euro, using the central banks’ official exchange rates on the last working day of 2020 and 2019, respectively. Local currency figures have been used when calculating year-on-year changes.
All data is sourced from central banks, national commercial registers, financial supervision commissions, insurance associations, government and corporate websites, and companies themselves.
The initial pool of companies exceeds 200 insurers.

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