Serbia Insurance Report Q2 2016
BMI View: Growth in Serbia's insurance market is expected to gather pace over the forecast period from2016 to 2020. Although one of the smallest markets in region, the country is home to a number of domesticand regional providers, and significant progress is being made in terms of broadening distribution channelsand developing a more robust product offering. We expect to see the strongest growth in the small lifesector, though we do note that low average household income rates continue to constrain growth potential.
Key Updates And Forecasts
Serbia continues to improve its regulatory environment. A new insurance law came into effect in 2015under which all life and non-life insurance companies must operate as separate entities. Compositeproviders are required to separate their life and non-life businesses. Serbia is also enhancing capitalisationrequirements, more in line with the EU-wide introduction of Solvency II regulations
The life insurance sector is expected to see the strongest growth during the forecast period, from 2016 to2020, driven by an improvement in the currently high unemployment rate (of around 20%) as well asincreases in average household income levels. Life premiums are forecast to grow by an average of10.6% (in local currency terms) annually during the forecast period.
The much larger non-life sector is expected to record slower annual growth of around 4.1% annuallybetween 2016 and 2020. In part this is due to the saturation of the dominant motor and property insurancelines, with the strongest growth expected in the smallest lines, such as credit and financial guaranteeinsurance.
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