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Bulgaria Insurance Report Q2 2011
Business Monitor International, Feb 2011, Pages: 71
The Bulgaria Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bulgaria's insurance industry.
Key Insights On Bulgaria’s Insurance Sector:
Writing in early 2011, we have been able to look back on another tough year for Bulgaria. After three years of healthy growth between 2006 and 2008, the global financial crisis had a brutal impact on the country’s insurance sector. In 2009, non-life premiums slipped by 5% and life premiums contracted by 19%. By July 2010 it was clear that it would also be a grim year. Estimated data compiled from the Financial Supervision Commission (FSC), shows non-life premiums contracted by about 7% in 2010. Premiums in the small life segment should stabilise in 2011 but we are unlikely to see levels close to those of 2007.
The report has seen changes in the sector in relation to the insurance of cars. Data from the FSC shows premiums for voluntary motor insurance (CASCO) fell from BGN366mn in the first seven months of 2009 to BGN298mn in January-July 2010 – down by 19%. However, during the same period, premiums for compulsory motorists’ third-party liability (CMTPL) insurance rose by 17%.
The forecasts for non-life premiums’ penetration is for it to rise from 2.15% of GDP in 2010 to 2.25% in 2015, and for life density to rise from US$23 per capita to US$40 per capita. This mean s an estimated total premiums amount in 2010 of BGN1,596mn, including non-life premiums of BGN1,357mn and life premiums of BGN240mn. In 2015, the corresponding figures a forecast to be BGN2,502mn, BGN2,006mn and BGN496mn. BMI’s Insurance Business Environment Rating for Bulgaria is 52.5.
Issues To Watch:
Competitive Arena
There are many players in the relatively small Bulgarian insurance market and we expect to some level of rationalisation in 2011.
Life Premiums Stabilisation
Stabilisation of life premiums is a possibility and will indicate that local savers perceive an improvement in the medium-term outlook for Bulgaria’s economy and financial markets.
Motor Insurance Premiums
Given that the growth in CMTPL premiums is probably unsustainable, we expect a more difficult market overall for non-life insurance in the coming months.
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