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Bulgaria Insurance Report Q3 2011
Business Monitor International, June 2011, Pages: 65
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.
- Robust recovery in the wider economy promises potential upside for the insurance sector.
- Stabilisation of life premiums is likely as confidence returns to local savers.
- Motor vehicle insurance continues to dominate the non-life segment as compulsory motor third-party liability (CMTPL) insurance drove growth.
Bulgaria’s insurance sector continues to face severe challenges stemming from its poor macroeconomic performance in recent years. However our view for Bulgaria to experience a more robust return to economic growth has played out sooner than we anticipated, and as such the prospects for the insurance sector are more promising in 2011. The Financial Supervision Commission (FSC) estimates that non-life premiums contracted by about 7% in 2010, although there is scope for marginal growth in 2011. BMI’s Insurance Risk/Reward Rating for Bulgaria is 50.2.
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. Premiums in the small life segment in particular could experience growth in 2011 but they are unlikely to reach levels close to those of 2007. We forecast that life density will rise to US$23 per capita this year.
In the changes to the regulations governing motor vehicle insurance have had a detrimental impact on the non-life sector. Data from the FSC show premiums for voluntary motor insurance (CASCO) were just BGN298mn in January-July 2010, a fall of 19% year-on-year (y-o-y). However, this was balanced by a rise in premiums for CMTPL insurance of 17% in the same period.
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