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Interview of the week

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Klime POPOSKI, President of the Council of Experts, Macedonian ISA


"We expect a growth, especially in the non-life property insurance, as well as in the liability insurance. Beside these two directions, a specific development trend has been noticed in the life insurance sector, namely the development of the bank insurance, a concept which till now, was not present on the Macedonian market, and by which, the policyholders will be offered with a new type of quality service".

XPRIMM: As any young insurance market, the Macedonian one is witnessing permanent changes? Did 2010 bring any new players?
Klime POPOSKI: At the end of 2010, 13 insurance undertakings have been active on the Macedonian insurance market, i.e., the same market participants as in 2009, of which, 11 are non-life insurance, and 2 are life insurance undertakings. Toward the end of December 2010, the new participant "WINNER Life-Vienna Insurance Group"- Skopje was granted with a license for conduction of life insurance operations.
During 2010, the number of insurance brokerage companies has reached 14, i.e., it was increased by 2 new companies, and the number of insurance agencies has reached the number of 6, i.e., it was increased by one new agency.

XPRIMM: How do you assess the evolution of the Macedonian insurance market in 2010 compared to 2009?
K.P: The level of development of an insurance market, measured through the basic indicators, density and penetration rate, shows that both indicators remain unchanged relative to 2009. At the end of 2010, the density rate was MKD3,154 (EUR51.27), while the penetration rate was 1.52%. The realized gross written premium in 2010 was MKD6.48bn (EUR105.37m), which represents a growth of 4.83% relative to the GWP realized in 2009.
The positive trend has been present in both insurance groups. The realized GWP in the non-life insurance was MKD6.48bn, or 94.53% of the total GWP of the insurance sector, which represents a growth of 4.83% relative to the same period in the previous year. In the life insurance, which represents 4.87% of the total GWP of the insurance market, the realized GWP was MKD354.5m, i.e., a growth of 17.85%. This information confirms the expected further development of this insurance group.
In the period January 1st - December 31st 2010, the insurance sector made a profit of MKD71.57m compared to the realized loss of MKD170.83m in the previous year. The profit made by the life insurance undertakings was MKD43.2m, while the profit of the non-life insurance undertakings was MKD28.3m.

XPRIMM: How did the financial crisis affect the Macedonian insurance market?
K.P: During 2010, the consequences from the financial crisis over the insurance sector were smaller. This was due to the fact that, unlike other countries from the region, the Republic of Macedonia achieved a growth of the GWP. The realized rate of real GWP growth is still unofficial, in ranges of 0.5% - 1%. Still, it indicates the recovery of the whole economy. The realized growth of the GWP of 4.83% in 2010 is also a proof for the economy's recovery, as well as the positive financial result in the insurance sector of MKD71.57m profit compared to the realized loss of MKD170.83m in 2009. In this context, it is also very important to emphasize the aspect of the insurance undertakings' investment activity, conditioned by the not sufficiently developed and shallow financial market in the Republic of Macedonia. In the previous years, this has also been a kind of protection buffer in creating loses, i.e., with only few types of investment instruments, predominantly bank deposits and government securities, the effects of the financial crisis were alleviated.

XPRIMM: What are your expectations for 2011?
K.P: We expect a growth, especially in the non-life property insurance, as well as in the liability insurance. A specific development trend has been noticed in the life insurance sector. The trend has also been evident in the realized financial result of the life insurance undertakings, as well as the starting of one new market subject, by which, the number of new life insurance undertakings for 2011 will be 2. In compliance with the submitted development programs, the expectation of the new insurance undertakings is to contribute to the development of the bank insurance, a concept which till now, was not present on the Macedonian market, and by which, the policyholders will be offered with a new type of quality service. In addition, the Republic of Macedonia supported the regional World Bank project for catastrophe risk insurance. The purpose of the project is forming of a joint re-insurance undertaking by several countries in Southeastern Europe and Caucasus region, by which, the insurance undertakings will be able to offer catastrophe risk insurance on the local markets with acceptable prices.


Editor: Vlad BOLDIJAR | Published on 07.07.2011






















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