Mid-term Results Of Life Insurance Companies Are Quite Good
Non-life insurance gross premia for the second three-month period of 2007 came to BGN 595 786 thousand, having realised growth of 17.97% on an annual basis achieving the greatest growth for the
last 1-2 years. In comparison for the whole 2006 the non-life insurers' premia increased by 15.33%, and the first three-month period of 2007 the increase was 12.6%.
The non-life insurance market analysis shows that the market is dominated by motor insurance - autocasco and MTPL including green card insurance - making 64.4% of all premia. The relative
share of the compensation payments made in the field of motor insurance came to 88.9%.
Approximately 19.82% of the gross premia income were made by the sales of insurance against fire and natural disasters and property damage insurance. General liability insurance generated
around 2.85% of total premia. Results from the sales of other insurance products are less than significant.
Autocasco realised greater premium income by 38.8%, general liability insurance - up by 34.9% and insurance against fire and natural disasters - 8%.
The numerous sales of autocasco insurance are in view of the record import an sales of motor cars - used and new ones. The bigger number of vehicles, however, had almost no impact on the income
from obligatory MTPL insurance - it is one and the same figure for the first half of 2006 and the first half of 2007 and that very fact should alert the insurance companies.
The general liability insurance income grew as it is compulsory by law for some professions, and also as a result of the growing awareness of its benefit.
Property insurance, however, is not reaching the same results, although property insurance is obligatory with a mortgage loan. The numerous natural disasters striking Bulgarian land lately did not
motivate the citizens to place reliance on the insurance companies. Same is the issue with agricultural insurance - it has never been popular but the disturbing fact is that it is becoming more and
more unpopular.
Another worrisome thing is the fact that 6 of 18 basic insurance products had registered a drop in their sales. Aircraft liability insurance, aircraft insurance and sailing vessels insurance are
among the most significant. Interesting is the fact that during the first 6 months of 2007 insurance covering credits and guarantees registered a sales drop, while the insurance against various
financial losses registered growth by the record of 97%.
The compensation payments made in non-life insurance amounted to BGN 204 919 thousand, registering 21.11% increase on an annual basis. The gross technical reserves amount - the resources available
for future compensation payments - increased by 31.57% on an annual basis and amount BGN 797 670 thousand. The technical results from non-life insurance transactions came to BGN 592 thousand as
compared to BGN 35 551 thousand for the second three-month period of 2006. By June 30th 2007 the assets of the non-life insurance came to BGN 1.203 billion as the growth on annual basis came to BGN
27.32%.
The leader in non-life insurance is the same as for the first three-month period - Bulstrad Insurance and Reinsurance Company. By June 30th 2007 the income of the company came to BGN 98.496
thousand making a market share of 16.54%. The company's premia have augmented by 16.82% as compared to last year. The good results are in view of the increase in motor insurance sales. Casco
insurance alone brought BGN 12 million more as compared to last year. MTPL insurance sales are higher by BGN 2 million.
If the company continues growing with the same pace at the end of the year it will achieve the absolute record for the Bulgarian market - premia of BGN 200 million. It is very probable that
Bulstard is to merge with Bulgarski Imoti (meaning Bulgarian Properties) by the end of this year and the final results would add BGN 40 million to the premium income and the market share of the new
structure would be approximately 20%.
Last year's top performer - DZI Non-life Insurance Company - now comes second. In comparison with the 2006 results, the income of the company has dropped by BGN 7 million and its market share is
reduced by around 4%. The decrease in the market position of the former state insurer is mainly in the sales of MTPL insurance which have brought BGN 1.689 million less. The company tried to
compensate with the sales of casco insurance which brought BGN 7.2 million more but could not keep it on top. DZI, however, can also conclude the year with income of more than BGN 200
million.
Third comes Allianz Bulgaria. By June 30th 2007 the income of the company came to BGN 78.411 million registering 6.6% growth when compared to the results for the same period last year and making a
market share of 13.17%.
Commenting on the financial results we cannot exclude few other insurance companies. Firstly, this is Interamerican Bulgaria, which registered income increase of 105% and moved from 17th position
to 14th. We have often critisised the company as with a shareholder like its it is unbecoming to be in the bottom of the chart. We, however, cannot disregard the fact that the insurer has spent
some money on advertising and Interamerican may become familiar to the public. The managers of the company may have found the right way and develop the potential of the company - and sustain the
good results.
Bulgarski Imoti Insurance Company had a good start in the beginning of the year. It augmented its premium income by 93.52% and its market share to 1.33%. Lev Ins Insurance and Reinsurance Company
did also perform well and increased its income by 81.76% and its market share by 2.79%, and thus the company moved from 8th position to 4th.
We should as well mention the licensing of a new company last year - UBB-AIG Insurance and Reinsurance Company whose premia for the first half of 2007 came to BGN 1.226 million. Its income is
generated mainly by insuring fire and natural disasters risk which UBB offers to clients getting mortgage loans.
Mid-term Results Of Life Insurance Companies Are Quite Good
Life insurance gross premia for the second three-month period of 2007, generated by the 14 life insurance companies on the Bulgarian market, came to BGN 101 722 thousand, having achieved 23.69%
growth on an annual basis. The business of the life insurers have been growing by 25-30% during the last 1-2 years.
Although the rate of growth has slowed down a little during the second three-month period of 2007, all drawbacks will be overcome and the income of the life insurance companies is expected to come
to BGN 230-240 million in the end of the year.
The compensation payments made in the field of life insurance amounted to BGN 26 388 thousand, registering 19.12% increase on an annual basis. The gross technical reserves increase by 36.19% to the
amount of BGN 309 766 thousand. The technical results from life insurance transactions came to BGN 7 282 thousand as compared to BGN 2 438 thousand in 2006. The assets of the life insurance
companies came to BGN 681 850 thousand achieving growth of 75.37% on an annual basis. Results show that the life insurance business is growing but it is no nearer its full potential.
The product with the greatest relative share in the income and the compensation payments made is life insurance and annuities with the respective 73.6% and 67%.
Life insurance achieved greater growth by 47.80%, accident insurance accomplished 44.16% increase and unit-linked life insurance products - 24.46%.
During the second three-month period there was decrease in sales of two other insurance products - health insurance and supplementary health insurance. The tendency was noticeable during the first
three-month period, too. And this comes to say that the clients have found the alternative of other financial products.
Leader, with the highest premium income from the beginning of the year, comes Allianz Bulgaria Life. By June 30th 2002 its income amounted BGN 28.239 million making a market share of 26.88%. The
Bulgarian-German company reached the first place in March last year and then in June dropped to number two. The company has again been the leader from the beginning of 2007 until now. In comparison
with June 2007, in June 2006 the income of Allianz Bulgaria Life amounted BGN 21.106 million and made a market share of 25.66%, i.e. the annual based growth comes to 33.8%. 80% of the company's
portfolio is of life insurance and annuities. The company is the leader in the sales of marriage&children insurance and comes second in sales of unit-linked insurance.
DZI is placed second on the life insurance market chart with income of BGN 20.098 million making a market share of 19.13%. In comparison with 2006, in 2007 the company generated at least BGN 1
million less income and had its market share reduced by around 6.7%.
Uniqa Life comes third with premia amounting BGN 15.368 million registering 94.83% increase as compared to the same period last year. Life insurance policies and unit-linked policies make most of
the company's portfolio and the former is the absolute most-selling product.
Another company worth mentioning is UBB-AIG Life which is still catching up with the major on the market. The company is selling three products only, at the UBB offices. If, however, the company is
to change its manner it may be a noticeable participant on the market.
Another interesting news from the second three-month period of 2007 is that KD Life, which was licensed in the end of last year, started issuing policies. Within the next few months other newly
licensed life insurance companies are as well expected to start issuing policies.
* The analysis of the Bulgarian insurance market is based on the information released by the Financial Supervision Commission. There is no information about the 4 companies doing business in
Bulgaria via branches who are not obliged to report to the Bulgarian supervisory body.
