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Non – banking financial
sector in Albania
Protecting consumers
Promoting markets
Enforcing law
Great prospective
of growth & development
Crans Montana Forum
15 May 2008
Markets regulated by Albania FSA
• Insurance
• Private pensions
• Securities
Crans Montana Forum
15 May 2008
2007 – “Insurance year”, paving way to a full
insurance decade
•
increase of the minimum capital in the range of EU requirements (Eur
3 mln)
•
growth rate of 30%, substantially higher than previous years
•
market assets increased by 17%, while liquid assets increased by
45%
•
market solvency increased by 35%
•
Group organization appeared for the first time
•
for the first time, reputable investors invested in private insurance
companies (Uniqa, TBIH, Aspis)
•
full privatization of INSIG is underway and expected to complete
within 2008
• insurance supervision s enriched by elements of risk based
supervision such as IRIS tests and ratios
Crans Montana Forum
15 May 2008
Albanian Insurance market in 10 last years
(figures in million All)
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
-
Gross paid claims
GWP
500
1.000
1.500
2.000
2.500
3.000
1998
1999
2000
2001
2002
752
783
710
736
1.537
1.847
2.017
2.967
3.500
4.000
4.500
5.000
5.500
6.000
2003
2004
2005
2006
2007
859
1.307
1.038
1.227
1.278
1.311
3.804
3.755
4.151
4.011
4.543
5.935
•Annual growth in 2007: 30%;
•Average annual growth in four previous years: 5%
Crans Montana Forum
15 May 2008
Structure of Albanian insurance market - 2007
7%
35%
65%
93%
motor compulsory insurances
life insurances
non - compulsory insurances
non life insurances
• although recently improved – market still oriented towards motor compulsory insurances;
• great potential to develop other non – life classes of insurance (mainly property, and liability);
• significant growth of the banking sector prompting for development of life insurances
Crans Montana Forum
15 May 2008
Albanian insurance market – comparative statistics
160
3
per capita (USD)
%of GDP
Albania
20
0,58
Slovenia
920
5,61
2.324
8,32
EU 25
premium per capita (usd)
insurance premiums
%of GDP
2,5
120
2
100
80
1,5
60
1
40
premiums as % of GDP
per capita
140
0,5
20
0
0
Albania
Macedonia
Kosovo
Bulgaria
Serbia
• low penetration of insurances in both life and non-life
• life insurance underdeveloped:
• premium per capita 1.4 usd / % to GDP – 0.4 per mille
Crans Montana Forum
15 May 2008
Insurance
Huge development in the years to come
•
strong growth of economy
•
favourable environment for operations
•
better regulation and supervision
•
promotion of insurance products such as: liabilities of oil operators,
counstuctors, hotel operators, mining, tourism, agriculture
•
national reforms in health sector and pensions
•
insurance programs for natural catastrophes on national basis
•
presence of the reputable international investors, towards a better
contemporary approach,good practices and business oriented
policies
•
increasing level of experience and expertise, and creation of ranges
of professionals
Crans Montana Forum
15 May 2008
How do Albanians invest for their own future?
Pensions
Question: getting older vs becoming wealthy in
Albania?
• young population (average age – 32 )
• good rate of GDP growth (5% - 7%)
• large potential of working force to generate money
today and save for the future
Answer: Optimistic view of becoming weatlhy before
getting older
• Regulation amendments needed for pensions
operations, taxation, etc.
Crans Montana Forum
15 May 2008
Securities
• securities market becoming increasingly attractive
for the domestic and foreign investors
• improvement in trading infrastructure (local
dealers)
• beneficiary risk – return combination
• increase in term of investment (2 and 5 year
emissions, and 7 year bonds )
• undergoing upgrades in the clearing and settlement
arrangements
• first benchmark bond in Euro in international
capital markets forecasted in 2009
Crans Montana Forum
15 May 2008
General
• establishment of the FSA as per the best
international models, is a clear signal of
consolidation and standartization of the regulatory
and supervisory regime
• to supervise does not any more mean mainly to lead
into confrontation with others, neither on the real
battlefield nor in economics, but to guide the
direction towards universal rule of the law
• the efforts paid by the FSA in enhancing the
regulation and supervision of the markets are very
well combined by the introduction of modern
integrated IT platform, which include various IT
systems such as Motor Information Center, Web
based off site reporting for insurance and pensions,
GSRM, etc.
Crans Montana Forum
15 May 2008
Why to invest in Albanian financial sector?
•
Political stability
•
•
Positive economic outlook
•
•
•
•
•
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Increase in GDP and control over inflation
Public investments, infrastructure
Expansion of the banking system
Optimistic expectations for the development of specific sectors like: energy,
construction, tourism, mining, etc.
Improved environment for businesses, tax incentives
Better regulation & supervision
•
•
•
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EU and NATO integration are the main goals of the country
FSA established as per the best models of integrating the non-banking financial
supervision
Review of regulation in compliance with international standards and EU directives,
aiming to enhance the development
Inclusion of risk based supervision elements, supported by IT modern platform
Increase of insurance experience & expertise
•
•
Increasing number of financial experts, well educated and trained
Motivation of specific professions such as actuaries, accountants, claims adjusters
(first class of Albanian actuaries certified in 2007)
Crans Montana Forum
15 May 2008
Foreign insurance investments already
here
Reputable European insurers now present in Albania:
Uniqa Group Austria – substantial shares in SIGAL Holding
company (since 2007), with operations in life & non-life insurances
in Albania, Kosova, and Macedonia
TBIH Financial Services Group N.V. ( owned 60% by Vienna
Insurance Group) – substantial shares in SIGMA company (since
2007) which operates in non-life insurance markets in Albania,
Kosova and Macedonia, and in private pensions market in Albania
Aspis Group – substantial shares in Interalbanian non life insurer in
Albania
Full privatization of INSIG – procedures are underway - expected to
complete within 2008
Crans Montana Forum
15 May 2008
Welcome to invest in Albania!
Thank you
Elisabeta Gjoni
Chairperson – Albanian FSA
Crans Montana Forum
15 May 2008