Life Insurance Companies Register A 40% Premia Rise For The First Three Months Of 2006
General insurance premiums amount BGN 271 570, registering a 14.14% rise as compared to the first three months of 2005, shows the market analysis prepared by the specialized electronic media
www.insurance.bg. The compensations paid amount BGN 79 474, i.e. registering a rise by 16.71%. MTPL insurance has the greatest contribution to the general
insurance incomes augmentation. The profit increase has risen by BNG 33. 650 million, as compared to the first three months of last year, 10% of which are due to the obligatory vehicle insurance.
This comes as no surprise to the specialists, in view of the measures taken by the government. Since the MTPL insurance price has not changed much in 2005- 2006, the better profitability is due to
the better insurance sales. The obligatory insurance was said to range some 50- 60% in the end of last year. These statistics were not very precise, however, since the Road Control Agency did not
have a realistic picture of the vehicles that were actually in service. The last figures, announced by the Financial Control Board, show a range of 97%. The percentage is very high and meets EU
requirements.
Statistics show that the actual MTPL amounts BGN 2 million, the average insurance policy price being BGN 73.
The insurance companies very abruptly lowered the obligatory vehicle insurance price at the end of last year and at the beginning of this year, recently, however, there has been an increase in the
premium collection. Next year the insurance will have to be liable not only for the territory of Bulgaria, but for the whole EU territory, and there will be a significant change in the price most
probably.
The most popular and well- selling insurance on the market “Autocasco” (vehicle insurance) has registered a rise by BGN 2 million for the first three months of 2006, and as it was mentioned above,
MTPL insurance has registered a rise by BGN 10 million, once more proving its market growth. What is more both types of insurance are equally profitable, which has never happened before.
All kinds of vehicle insurance sales profits amount 65% of all general insurance incomes. The tendency of the automobile insurance to be the best selling insurance does not seem to fail, and is not
expected to.
“Bul Ins” Insurance Company is the “Autocasco” insurance sales leader, holding 26.16% of the market segment. DZI (General Insurance) is selling most MTPL insurance (including “Green Card”) holding
30% of the market segment.
Second and third best selling are “Coflagration and Natural Disasters” and “Property Damage” insurance, their joint market share being 18.38%. These insurances profits have risen by some 19%, as
compared to last year.
“Bulstrad” collected the greatest property insurance incomes, holding 25% of the market segment.
The type of insurance that have registered the greatest profitability for the first three months of 2006,however, is the “Vessel Insurance”, recording a 21% rise. “General MTPL Insurance” has been
selling well, but maybe due to some of its obligatory features.
There is no interest at all in the “Legal Expenses” insurance. The only company registering any profit, and the profit amounts BGN 492, is INTERAMERICAN.
DZI General Insurance registers the highest premia for the first three- month period of 2006. After the assassination of the company owner and chief manager, Mr Emil Kuylev, most experts thought
the ex- state insurer was to undergo certain concussion. Prognostics were wrong and the company recorded the highest profits for last year. Similarly it registers the greatest incomes for the first
three months of 2006, coming up to BGN 55.742 million. Most exports expect the company profitability to exceed EUR 100 million by the end of the year, if the company keeps the same benefit
pace.
The DZI market share comes up to 20.53%, its profitability has risen by 11.62% as compared to last year. The relatively greatest part of the company portfolio is taken up by MTPL insurance and
“Casco” (vehicle insurance), covering some 78%.
“Bulstrad” is the company with the second highest premium incomes, amounting BGN 48. 208 million, for the first three months, i.e. registering a 12% rise compared to the same period of last year.
The company market share comes up to 17.75%, being 18.07% last year. Bulstrad’s best selling insurance being MTPL, “Coflagration and Natural Disasters”, “Casco” and “Vessels Insurance”.
“Allianz Bulgaria” occupies the third place with premia amounting BGN 39. 345 million. The company market hare being 14.49%. Allianz took some serious marketing measures to participate more
actively on the obligatory insurance market. Yet the obligatory insurance sales place it fifth.
The analysis shows still great business concentration- the first three companies hold 52% of the market. Their share has decreased by 2 points, compared to last year. Such tendency was noticed
before, which means the small insurance companies can manage their business successfully. Out of the first three companies, there are companies such as HDI Insurance, QBE, AIG and “Bulgarian
Properties” (owned by the biggest Austrian insurer Vienna Insurance Group) which occupy certain market positions but are not at least satisfied and will be more active in the future. Another
example is “Vitosha” Insurance company which has always been stable on the market, but now it is expected to achieve more sine the Austrian insurance group UNIQA obtained a part of it.
The companies that recorded premium rises during the first three months of 2006 are “Bulgarian Properties”- an 88.09% rise, “Orel”- 80%, “Armeetz”- 44.72%. The only company that registered lower
incomes than those of last year is “Energy”.
The twelve life insurance companies have realized a profit of BGN 43 046 thousand, i.e. a 39.81% rise as compared to the first three- month period of 2005. The good news is that the market growth
has been recorded for a second year which means the insurers have found the right way.
The compensation payments made amount BGN 10 827 thousand, i.e. registering a 22.92% rise.
Such a market development pace suggests that the overall insurance companies premium is to exceed EUR 100 million by the end of the year. The results may be even better given that some tax relief
is expected for employers insuring their workers.
One of the best selling insurances is the classic “Life Insurance”. Its profit share comes up to 61.12%, its profitability has risen by BGN 9 million, and its market share- by 5 points.
Second most profitable are the supeannuation funds and renting insurance, their incomes amounting BGN 5. 885 million, i.e. 13.67 % of all incomes. Third most profitable is the additional insurance,
its income share being 6.5%. More and more popular is becoming the “Investment Fund Involved Life Insurance”.
The most profitable life insurance company is DZI, with an income amounting BGN 10 496 million, registering a 19.34% rise. The company market share is 24.32%. DZI sells the most of all types of
insurance, holding 93.92% of the “Investment Fund Involved Life Insurance” market segment, 40.69% of the superannuation funding, 40.20% of the health care activities.
The second most profitable company is Allianz Bulgaria, its premium amounting BGN 10. 014 million, i.e. a 23.26% market share, registering a rise by 19.42% as compared to last year.
The third place is occupied by “Bulstrad Life” with premia amounting BGN 5.432 million, registering a rise by 156.87%, its market share augmented from 6.87% to 12.62%. The company was placed fifth
last year. The commercial success is due mainly to the classic life insurance sales and the additional insurance sales.
“Vitosha Life” insurance company (placed fourth) deserves to be mentioned with its record rise by 201.49%.
Other companies that have reached certain positive results are “Orel Life”, “AIG Life” and “DSK Guarantee” occupying, respectively, the fifth, sixth and seventh places in the profitability
classification. The other companies, notwithstanding their better positions, are pretty humble on the market.
Here, as well as on the general insurance market, a certain concentration is noticed. But still there are some 3- 4 companies ready to replace one of the leading ones. “Bulstrad Life” and “Vitosha
Life” insurance companies market positions prove the words above. More and more active is “DSK Guarantee” that entered the market only a year ago.
The market tendency is for even greater competitiveness since few other foreign investors are to enter the market. “ING Insurance”, for example, one of the major world insurers is expected to enter
the market within 2 months. The greater competitiveness is most advantageous for the customers who are to receive better products at a better price.
