Insurance Sector in Serbia for Q3 2023

The National Bank of Serbia, Insurance Supervision Department, issued a report on the insurance sector in Serbia for Q3 2023. When it comes to market participants, there are no changes; at the end of Q3 2023, the insurance market in Serbia comprised twenty insurance and reinsurance companies.

Sixteen of these twenty were engaged in insurance activities only, and four were engaged in reinsurance activities. If we take a closer look at insurance companies, the report states that four were exclusive life insurers, six were exclusive non-life insurers, and six provided both life and non-life insurance.

When it comes to ownership in the insurance sector in Serbia for Q3 2023, fifteen insurance companies were in majority foreign ownership. This led to foreign-owned insurance and reinsurance companies holding majority shares of life insurance premiums (85.7%), non-life insurance premiums (61.0%), total assets (70.0%), and employment (64.8%).

Apart from insurance and reinsurance companies, there were also other participants in the insurance market, such as banks, financial lessors, insurance brokerages, insurance agents, and certified agents and brokers in insurance. The structure of these other participants in the insurance sector in Serbia for Q3 2023 was:

  • 15 banks,
  • 9 financial lessors and public postal operators who are licensed for insurance agency activities,
  • 111 legal entities (insurance brokerage and agency  services),
  • 76 insurance agents (natural persons—entrepreneurs), and
  • 4,323 active certified agents or brokers in insurance.

When it comes to insurance portfolio structure, the total premium in the insurance sector in Serbia for Q3 2023 amounted to RSD 115.6bn (EUR 986mln or USD 1,068mln), a rise of 16.3% relative to the same period last year. In the composition of the premium, the share of life insurance premiums dropped from 20.3% in Q3 2022 to 18.5% in Q3 2023, due to higher nominal growth in non-life insurance premiums than in life insurance premiums.

When examining the premium structure by type of insurance, Q3 2023 data somewhat resembled that of the same period in 2022. The largest share of the total premium (29.9%) was accounted for by motor vehicle liability insurance this time, followed by property insurance (19.2%), life insurance (18.5%), full coverage motor vehicle insurance (“kasko”) (10.6%), and voluntary health insurance (10%).

It is notable that motor third-party liability (MTPL) rose by 18.4% year over year in Q3 2023 and that three companies with the largest share in the MTPL insurance premium accounted for 58.1% of the market in Q3 2023, compared to 57.7% in the same period last year.

Major changes in the new Law on Compulsory Auto Insurance in Croatia

In mid-December, the Croatian Parliament confirmed the decision that would enable the abolition of the monopoly of insurance companies. Thus, the Parliament took the side of consumers and car repairers, and after 15 years, they harmonized this Act with the legal framework of the EU.

What are these major changes in the new law on compulsory auto insurance in Croatia?

First of all, under the new law, insurers have fewer rights because insurance companies will no longer be able to assess and determine how much an hour of work will cost and dictate where cars will be repaired. From 2024, hourly service rates will be recognized, not the imposed ones of only 13 euros that have not changed for decades, and policyholders will be able to count on a replacement car in the future.

This means that after a collision, the insurers will no longer be the first to go, but to the service center because the service centers will also be able to do damage assessments at their own, not imposed, prices. It means that there is no longer an insurance monopoly that allows them to simultaneously assess and determine the amount of damages and to ‘force’ consumers into services that they specify.

“The Croatian Association of the Automotive Industry made a huge contribution to the creation of the new law, the aim of which is to bring order to this dark zone of business, which generates several illegalities and irregularities, and to bring it into line with European regulations. The previous law encouraged the gray zone and “theft.” At the same time, due to the huge number of settlements and more than 65 percent of the total number of damages, the safety of poorly repaired vehicles was also threatened, and the state lost EUR 50 million annually in VAT alone,” is stated in the press release from the Croatian Association of the Automotive Industry (HUAS).

Also, the news is that the payment of damages is made within 15 days from the sending of the reasoned offer of the insurer, that is, within a maximum period of 60 days.

The Croatian Association of the Automotive Industry was able to promote greater consumer rights, and the car service profession finally started to be appreciated. Three new things have been added, and HANFA—the body that oversees insurers—must draft a new regulation outlining the specifics of the insurance claim processing process.

The most important major changes in the new law on compulsory auto insurance in Croatia are:

  • Mandatory payment of damages (the undisputed part of the damages or invoice) within 15 days of sending the explanation to the injured party. And that is at the expense of repairmen.
  • The injured party’s right to an independent assessment and the right to submit a service workshop offer are introduced. Now it is a legal right!
  • Greater rights and information for the injured party.
  • HANFA, as a regulator, issues another regulation for the processing and payment of damages.

We are growing – new partnership with NB Invest

As one of the leaders in property insurance, insurance brokerage company NB Invest from Belgrade successfully markets over one billion euros of non-life insurance with domestic insurance companies. NB Invest, founded in 2013, has concluded brokerage contracts with all domestic insurance companies.

With both domestic and foreign companies as their clients, they manage to provide optimal insurance conditions, adequate coverage, and a favorable insurance price. And now, together with Gortyna, they will be in a position to provide the best possible support whenever their clients have an insurance claim.

Our claims services will be available to both NB Invest and their clients. And that list is really impressive: Auto Čačak, Educons University, Univerexport, Olympic Committee of Serbia, etc.

As stated by Božidar Todorović, General Manager at NB Invest, “In the insurance business, we always try to define the risks surrounding the client’s business and later find adequate insurance coverage. This is the adopted standard in our business, and we have gained a recognizable name on the domestic market because of it.”

Both NB Invest and Gortyna will work side by side to improve and upgrade the levels of services that they provide and establish a cooperative relationship beneficial to all parties involved, especially clients.

The client of our partner is our client!

New partnerships, new opportunities

Although you will find them on our client page, we ought to look at brokerage companies as our partners! That is why we see our agreement with Aspekt IFA posredovanje u osiguranju as a new partnership and a new opportunity. An insurance broker is an insurance advisor or consultant who knows the insurance market, understands the client’s needs, and helps and mediates when concluding contracts. An insurance broker does not sell insurance but takes on the client’s work in searching for and choosing the best offer.

With the same goal in mind: to provide the best possible service and solutions to clients, this cooperation is a perfect fit.

This cooperation will be beneficial for all parties: the insured, that is, clients, Apsketf IFA and Gortyna.

Founded in 2008, Aspekt IFA has a long track record of success. It is established as a trustworthy company that has the interest of its clients in the first place. This is why we truly believe that this cooperation has a great future and that it will lead to an improvement in the level at which both companies provide services.

Aleksandar Marinković, Founder and General Manager, stated: “I am thrilled and excited that we managed to find common ground and common interests with Aspekt IFA. Both companies seek to provide the best service to their clients and put clients first. This is why it was easy to arrange this partnership, and we look forward to helping clients of Aspekt IFA with regard to their insurance claims. Aspekt IFA was the first insurance brokerage company to recognize what we do and how we do it. I am thankful to their Founder and Manager Branko Divjaković for trusting us with their client.

The client of our partner is our client!

Insurance customers are far more open to sharing data than previously assumed by the industry

A recent survey conducted by Sollers Consulting and IPSOS revealed that insurance customers are far more open to sharing data than previously assumed by the industry.

According to the study, which included 3,800 insurance customers from the UK, France, Germany, and Poland, a sizeable majority of customers are open to sharing data in exchange for lower premiums.

The results of the survey show that almost one-third of insurance customers expressed a willingness to disclose information in exchange for premium discounts.

According to the survey, insurance customers are increasingly adopting digital insurance plans that call for sharing information about the devices they use.

34.5% of respondents said they would be willing to share information with their insurers to obtain more affordable plans in the face of pressures from inflation and a cost-of-living problem.

Out of the nations studied, Polish insurance customers showed the most willingness to share data in exchange for premium discounts, with 41.25% showing an interest in this possibility. Respondents from Germany (36%), the UK (32.75%), and France (26.75%) were not far behind, indicating a strong demand for data-driven insurance solutions throughout Europe.

With a remarkable acceptance percentage of 51%, on-demand insurance, which enables consumers to switch coverage on and off, stood out as the most popular. With a 50.25% approval percentage, usage-based insurance, such as pay-as-you-drive, was also highly appreciated.

The most popular and well-liked data-driven insurance alternative is car telematics, which records driving behavior using sensors in the car or smartphones.

Even while smart home insurance is less common, one-third of customers still show a lot of interest in it.

The adoption of data-driven strategies and a better understanding of individual risks are now possible for insurers, which will result in the creation of more affordable and specialized insurance solutions.

Experts predict that insurance companies will make investments in rebuilding their data architecture and creating new customer-centric solutions in the upcoming years in response to these evolving preferences.

The question that remains is what effect this will have on claims settlement and claims services in general.

The National Bank of Serbia published the report for 2022 for the insurance sector

On June 19, 2023, the National Bank of Serbia (NBS) published the report for 2022 for the insurance sector. Among other things, the report provides us insights into the activities of the National Bank of Serbia in 2022, an analysis of the insurance market, and business indicators.

When it comes to the insurance market, the NBS states in its report that “The five countries with the largest share in the total premium realized on the world market (USA, China, Japan, Great Britain and France) in 2021 covered 65.8% of that market, while the Republic of Serbia ranks 79th in the world according to the realized premium.” It is further stated that the Republic of Serbia is in a satisfying position, with the potential for improving this position.

When it comes to the market participants themselves, the authors of the report state that there are 20 (re)insurance companies operating in the Republic of Serbia and that their number has not changed compared to the previous year. Out of these 20, 16 companies deal exclusively with the insurance business, and only 4 companies deal exclusively with the reinsurance business. Of the companies engaged in the insurance business 4 companies deal exclusively with life insurance, 6 deal exclusively with non-life insurance, and 6 companies deal with both both life and non-life insurance.

Finally, when it comes to premium amounts, the report stated that in 2022, insurance companies generated a total premium of 133.9 billion dinars (1.1 billion euros or 1.2 billion dollars), which represents an increase of 12.2%.

Analysis of the sales channels showed that the largest part of the total premium in 2022 was realized through: insurance companies (63.0%), insurance brokers (12.9%), technical inspections (8.9%), insurance agents (5.5 %) and banks (4.5%).