The latest statistics from the Croatian Financial Services Supervisory Agency (HANFA) indicate that non-life premiums continued to contract in the first seven months of 2012 and were about 2% less than they were in 2011. Life insurance grew by about 2%. As we have said in previous reports, the lack of interest in unit-linked products over the last 18 months or so points to an element of caution among Croatia's investors and savers. Economic conditions are expected to remain challenging.
Nevertheless, there are a number of obvious strengths. One reason for the slippage in premiums is that companies are focusing on profitability ahead of growth for its own sake as highlighted by the H112 results of market leader CROATIA Osiguranje. For a small country that is not yet a full member of the EU, a large number of multinational companies are present. Some of these are comparatively small Austrian groups such as GRAWE and Merkur. However, Allianz, Vienna Insurance Group (VIG, through three different subsidiaries), Generali, ERGO and UNIQA are present, as are less frequently encountered names such as Triglav and Baloise. Croatian households and businesses are being offered risk management and savings solutions by a variety of companies that can exploit opportunities of scale across European or even global businesses.
CROATIA Osiguranje, which the government's now only has a 51% stake in, is not such a company. It remains BMI's view that another substantial shift in the shareholding of CROATIA Osiguranje could prove to be the catalyst for major and beneficial consolidation of a fairly fragmented insurance sector. Source; Fast Market Research