Slovenia Insurance Report Q3 2012

The Slovenia Insurance Report considers the prospects for both life and non-life insurers in that country.

Relative to its peers in Central and Eastern Europe, Slovenia is an anomaly in that the insurance sector continues to be dominated by Triglav, the former state-owned monopoly that accounts for around onethird of total premiums in Slovenia, and three other local groups. Multinational giants who have leading positions in other countries in the region are present in Slovenia, but have relatively small market shares.

It is also unusual in that the non-life segment is boosted through the inclusion of substantial health insurance premiums.

The latest data published by the trade association indicates that operating conditions have been challenging, but far from disastrous, for the leading insurers in Slovenia. Demand for life insurance products has stagnated in face of volatility in financial markets in the eurozone in late 2011 and early 2012. Weak economic conditions, competition in motor-related lines and excessive claims in some lines have been difficulties that many non-life insurers have had to face. The insurers have responded to this by tightening underwriting standards and developing new products (especially in the non-life segment) and taking steps to boost retention ratios (especially in the life segment).

Nonetheless, the prospects for growth in what is a small and, by some metrics, well developed market are limited. For its part, Triglav is looking at opportunities in other parts of the former Yugoslavia, and elsewhere. A recent highlight was a capital injection of EUR25mn, as a result of a partnership – signed between Triglav and the International Finance Corporation – in April 2012. Over the last quarter, BMI has made the following changes:

There is a detailed discussion of the results published in April 2012 by Triglav in relation to 2011.

The analysis takes into account BMI’s latest assessment of an economic environment that remains moderately challenging.