January 16 (SeeNews) - Slovenia's biggest insurer, Zavarovalnica Triglav [LJE:ZVTG], views life insurance as the segment with the greater mid-term potential on its home market while in the rest of the Adria region its bet is on the non-life business, a member of the company’s managing board said.
Abroad, Triglav has operations in Croatia, Bosnia, Serbia, Montenegro, Macedonia and the Czech Republic. It is the biggest insurance company in Southeast Europe (SEE) in terms of premium income.
In 2013, the Slovenian insurance market was affected by a combination of negative factors that included weakened spending power of households, increased caution of policyholders and lower insurance density, Benjamin Josar told SeeNews in an emailed interview.
The negative backdrop was further compounded by rising unemployment, new corporate bankruptcies, contraction in bank lending and declining sales of motor vehicles.
“Consumer habits are changing. People are more price-conscious and always on the lookout for the best value for money, even in the insurance business. In the region, there is a growing trend towards preference for basic products, i.e. compulsory, accident and basic property insurance. The crisis has also been felt on the life insurance segment where people are opting for this type of coverage less often than before the downturn,” Josar said.
There were 15 insurance companies and four foreign branch offices active in Slovenia in the first nine months of 2013. They recorded combined gross written premiums of 1.5 billion euro ($2.04 billion), down 2.2% from the same period of 2012.
At the end of September, the Triglav Group had a combined market share of 36.2% in Slovenia. The company expects to post a consolidated net profit of 65.6 million euro in 2014. Despite the harsh economic conditions, consolidated gross written premiums are seen at 902.1 million euro this year.
Forecasts show that the conditions on the markets where Triglav conducts its business will once again remain uncertain in 2014. This also includes Slovenia, Josar said.
Triglav’s business strategy until 2017 projects further growth and development within the group on target SEE markets, which includes achieving a minimum of 10% market share on all key foreign markets.
“We see the entire region as being rife with opportunities for organic growth, as well as for growth through acquisitions and capital tie-ups. This leaves all options wide open,” Josar said.
TRIGLAV INT CONCEPT HERE TO STAY
The Ljubljana-based holding company Triglav INT was established by Zavarovalnica Triglav with the intention of transferring into it ownership of its subsidiaries outside of the European Union.
In April 2012, the International Finance Corporation (IFC) signed a deal to acquire a 16.68% stake in Triglav INT. Roughly a year later, the deal collapsed after the IFC failed to subscribe and pay for the Triglav INT shares within the agreed deadline.
Josar is adamant that the current Triglav INT concept is here to stay as it offers a good opportunity to form potential strategic partnerships in the future.
“It is planned to use the concept to raise necessary financing in case of potential future acquisitions on interesting and promising markets, chief among which are non-EU markets, where the Triglav Group is already present.”
AMPLE ROOM FOR EXPANSION IN CROATIA
In Croatia, the average insurance premium per inhabitant is almost four times lower than in Slovenia, which means there is untapped potential for premium growth, Josar said.
“Croatia’s accession to the EU has also brought about the liberalisation of the insurance market, which enables new insurance companies to gain easier access to the market and also intensify competition.”
Croatia – where Triglav made an unsuccessful play last year for a stake in the region’s second largest insurer, Croatia Osiguranje, joined the EU in July 2013.
Domestic and foreign insurance companies in Croatia will increasingly offer a wider range of vehicle and other property insurance, especially liability insurance, additional medical services, as well as access to the private health sector, Josar said.
($=0.7342 euro)
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