Slove­nia's Triglav eyes po­si­tion of SEE in­sur­ance hub

Top 100 See - - Top 100 Insurers - By Ge­orgi Ge­orgiev

Were there signs for a turn­around on the Slove­nian in­sur­ance mar­ket in 2014? When do you ex­pect a sus­tain­able re­cov­ery could take shape?

The in­sur­ance industry is di­rectly linked to the con­di­tion and devel­op­ment stage of a given econ­omy. Un­for­tu­nately, eco­nomic re­cov­ery af­fects our busi­ness with a cer­tain de­lay. The econ­omy in Slove­nia, where the Triglav Group gen­er­ates al­most 84% of gross writ­ten pre­mi­ums, as well as in most other coun­tries where the Group op­er­ates, showed some signs of re­cov­ery and mod­est growth al­ready in 2014. The in­sur­ance busi­ness, how­ever, is still in­flu­enced by the ef­fects of the long-last­ing eco­nomic cri­sis. The pur­chas­ing habits of pol­i­cy­hold­ers have changed, the num­ber of pol­i­cy­hold­ers has de­creased and the in­sur­ance den­sity has dropped. The stag­nat­ing in­sur­ance mar­ket ad­di­tion­ally in­creases com­pe­ti­tion among in­sur­ers, which fur­ther

af­fects the vol­ume of writ­ten pre­mi­ums.

How did Triglav cope with trends on the Slove­nian mar­ket in 2014?

Zavaroval­nica Triglav and the Triglav Group re­sponded to the ex­ist­ing ad­verse con­di­tions in the Slove­nian and for­eign mar­kets by adapt­ing mar­ket­ing and sales poli­cies, launch­ing new prod­ucts and re­design­ing the ex­ist­ing ones and both took var­i­ous mea­sures to im­prove their in­sur­ance tech­ni­cal re­sult in non-life in­sur­ance. We are sat­is­fied with our per­for­mance in 2014 and have been able to main­tain both profitabil­ity and fi­nan­cial sta-

Eco­nomic re­cov­ery slow to fil­ter through to in­sur­ance mar­ket

bil­ity. Our mar­ket share in Slove­nia in­creased by 0.3 per­cent­age points to 36.1% last year.

How did Triglav Group per­form in the rest of South­east Europe (SEE) in 2014?

The Triglav Group, the lead­ing in­sur­ance/fi­nan­cial group in the Adria re­gion, per­formed well on the SEE mar­kets part of its foot­print. The Group con­sol­i­dated its po­si­tion as the mar­ket leader on the in­sur­ance mar­kets of Slove­nia, Mon­tene­gro and Mace­do­nia, as well as stick­ing to the set strate­gic guide­lines in Ser­bia, Croa­tia and Bos­nia and Herze­gov­ina. The mar­ket share in Mon­tene­gro was 38.2%. In Mace­do­nia, where the Group pro­vides only non-life in­sur­ance, its mar­ket share in that seg­ment rose by 0.3 per­cent­age points to 17% in 2014. With a 3.8% mar­ket share as at the 2014 year-end the Triglav Group posted the big­gest im­prove­ment in its mar­ket po­si­tion in the Ser­bian mar­ket, i.e. by 0.8 per­cent­age points. The Group held a 3.7% mar­ket share in Croa­tia, while in the in­sur­ance mar­ket of Bos­nia and Herze­gov­ina as a whole its share was 7.6%.

The in­sur­ance mar­kets in the Balkan coun­tries, from Croa­tia to Mace­do­nia, have po­ten­tial for growth. De­spite chal­leng­ing eco­nomic con­di­tions, most of these mar­kets have ex­pe­ri­enced growth. Our mar­kets out­side Slove­nia have dif­fer­ent char­ac­ter­is­tics and re­quire a mod­i­fied devel­op­ment ap­proach. With this in mind, we are boost­ing Triglav INT as a hold­ing com­pany, the di­rect owner of all our sub­sidiaries out­side Slove­nia and a cor­po­rate gov­er­nance ve­hi­cle. In line with its strat­egy un­til 2017, the Triglav Group will con­tinue to con­sol­i­date its po­si­tion in the re­gion through clearly fo­cused ac­tiv­i­ties and de­velop into the in­sur­ance hub of the SEE re­gion.

What key trends are emerg­ing on the SEE in­sur­ance mar­ket? How are they go­ing to af­fect your busi­ness over the medium term?

The in­creased level of com­pe­ti­tion is the main trend in the in­sur­ance mar­kets of the six coun­tries cur­rently cov­ered by the Group. This trend is most vis­i­ble in the Croa­t­ian mar­ket as a re­sult of lib­er­al­i­sa­tion of the mo­tor ve­hi­cle li­a­bil­ity in­sur­ance mar­ket.

Each of the in­sur­ance mar­kets in SEE cov­ered by the Group is also af­fected by the eco­nomic con­di­tions and the mar­ket devel­op­ment level in any of these coun­tries, as the sit­u­a­tion in the re­gion is not uni­form. In 2014, the SEE coun­tries posted mod­est eco­nomic growth, with the ex­cep­tion of Croa­tia, where the re­ces­sion con­tin­ued, and Ser­bia, where it started. In­sur­ance pre­mium per capita as an in­di­ca­tor of in­sur­ance mar­ket devel­op­ment also shows sig­nif­i­cant dif­fer­ences. In 2013, it ranged from 960 euro in Slove­nia to 280 euro in Croa­tia, while in other coun­tries of the for­mer Yu­goslavia it was be­tween 50 and 120 euro. As al­ready men­tioned, we be­lieve that the re­gion has po­ten­tial for growth in the com­ing years.

The Triglav Group takes into con­sid­er­a­tion the above-stated facts in its op­er­a­tions in in­di­vid­ual mar­kets. As a re­sult of the eco­nomic cri­sis and ag­gres­sive com­pe­ti­tion, the Triglav Group is re­spond­ing to changed consumer be­hav­iour by tak­ing sev­eral mea­sures such as adopt­ing new sales ap­proaches, launch­ing new prod­ucts, spe­cial of­fers, in­ten­sive sales ac­tiv­i­ties in both the in­ter­nal and the ex­ter­nal sales net­work, amend­ments and ad­just­ments of the in­sur­ance terms and con­di­tions as well as se­lec­tive risk un­der­writ­ing.

What in­sur­ance prod­uct cat­e­gories paced growth on the wider SEE mar­ket in 2014? Where do you see un­tapped growth po­ten­tial over the near term?

In most SEE mar­kets, the Triglav Group recorded growth in sev­eral mo­tor ve­hi­cle in­sur­ance classes, mainly in mo­tor ve­hi­cle li­a­bil­ity in­sur­ance. Some in­creases were also recorded in pre­mi­ums from other and real prop­erty in­sur­ance, es­pe­cially by at­tract­ing new clients. In ad­di­tion to the Slove­nian mar­ket, health in­sur­ance prod­ucts grew in Mon­tene­gro and Ser­bia. High health in­sur­ance growth was achieved by the Sara­jevo sub­sidiary, pri­mar­ily as a re­sult of good sales via agen­cies and banking sales chan­nels.

Each of the six coun­tries in the Adria re­gion where the Triglav Group op­er­ates has some spe­cific fea­tures, which the in­di­vid­ual in­sur­ance sub­sidiaries of the Triglav Group take into ac­count to de­fine their strate­gic guide­lines and busi­ness plans.

In the long run, in Slove­nia there is growth po­ten­tial for health and pen­sion in­sur­ance and in other SEE mar­kets two seg­ments will po­ten­tially grow. The first seg­ment is non-life in­sur­ance (other classes ex­clud­ing mo­tor ve­hi­cle in­sur­ance) and var­i­ous life in­sur­ance classes. Life in­sur­ance, which in the mar­kets of the Triglav Group is less present than non-life in­sur­ance, cur­rently rep­re­sents a mi­nor share in the Group's to­tal gross writ­ten pre­mium, i.e. ap­prox­i­mately 22% at the 2014 year-end. The sec­ond seg­ment is health in­sur­ance, where long-term growth is ex­pected.

When do you ex­pect a con­sol­i­da­tion drive in the SEE in­sur­ance sec­tor could gather sig­nif­i­cant mo­men­tum?

We be­lieve that in some mar­kets the in­sur­ance sec­tor will have to be con­sol­i­dated be­cause the present struc­ture is too frag­mented. Un­for­tu­nately, it is im­pos­si­ble to es­ti­mate when this will hap­pen. The in­sur­ance mar­kets in this re­gion, from Croa­tia to Mace­do­nia, have po­ten­tial for growth. In line with its strate­gic guide­line, the Triglav Group will con­tinue to con­sol­i­date its po­si­tion in the re­gion and to de­velop as the SEE in­sur­ance hub. That will be achieved through or­ganic growth, strate­gic part­ner­ships and po­ten­tial takeovers, the lat­ter de­pend­ing on any right op­por­tu­nity that may arise and which we con­tinue to look for.

Stag­nant con­di­tions on in­sur­ance mar­ket in­ten­sify com­pe­ti­tion

Ben­jamin Josar, mem­ber of the man­age­ment board

Slove­nian in­sur­ance com­pany Zavaroval­nica Triglav, set up in 1990, is the con­trol­ling com­pany of Triglav Group. Triglav Group posted a con­sol­i­dated net profit of 85.7 mil­lion euro in 2014, up 23% from a year ear­lier. Con­sol­i­dated gross writ­ten pre­mi­ums dropped 1% to 888.2 mil­lion euro in 2014. The group, listed on the Ljubl­jana Stock Ex­change, is ac­tive in Slove­nia, Croa­tia, Bos­nia and Herze­gov­ina, Ser­bia, Mon­tene­gro, and Mace­do­nia.

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