Vrnjacka banja, 14.6.2013

INSURANCE MARKET IN THE REPUBLIC OF MACEDONIA

DISCLAIMER

The findings, interpretations and conclusions expressed in

this presentation are those of the author and do not

necessarily reflect the views of the Insurance Supervision

Agency of Republic of Macedonia, or its Council of experts’

members. The Insurance Supervision Agency of Republic of

Macedonia does not guarantee the accuracy of the data

included in this presentation.

INSURANCE MARKET PROFILE

• 15 Insurance undertakings (11 non-life; 4 life)

• 22 Insurance brokerage companies • ASUC Broker AD Skopje got a license in 1Q 2013 • CVO Broker AD Ohrid got a license in 1Q 2013

• 9 Insurance agencies

• 1 Bank which acts as insurance agency • Ohridska Banka AD Ohrid member of Societe General Group

• 660 Insurance agents • 297 Licenses brokers Insurance penetration - GWP in % of GDP – 1,52% Insurance density - GWP per capita – 55,3 EUR/capita

GROSS WRITTEN PREMIUM RATIOS

• Gross Written Premium : 2012: EUR 113.9 million (104.2 non life; 9.7 life) 2011: EUR 110.8 million (102.5 non life; 8.2 life) 2010: EUR 105.4 million ( 99.6 non life; 5.7 life) 2009: EUR 100.5 million ( 95.6 non life, 4.9 life)

12/11 11/10 10/09

↑ Gross Written Premium 3.02% 5.05% 4.83%

↑ Non life premium 1.65% 3.02% 4.16%

↑ Life premium 20.35% 40.19% 17.85%

MARKET CONCENTRATION- 2012

Non – life companies

Life companies

Qbe, 10.66% (2011: 11.79%)

Triglav, 19.23% (2011:19.38%)

Sava, 10.86% (2011: 12.23%)

Evroins, 7.30% (2011: 7.22%)

Eurolink, 12.35% (2011:12.25%)

Winner, 9.82% (2011: 8.41%)

Insig, 2.84% (2011:2.85%)

Uniqa, 7.70% (2011: 7.38%)

Ins. policy, 9.00% (2011: 9.05%)

Albsig, 5.09% (2011: 5.11%)

Croatia nonlife, 5.15% (2011: 4.03%)

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Qbe life, 1.34% (2011: 2.30%)

Croatia life, 40.76% (2011: 40.44%)

Grawe, 44.37% (2011: 49.17%)

Winner life, 6.73% (2011: 5.38%)

Uniqa life, 6.80% (2011: 2.71%)

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

GWP - LINES OF BUSINESS

46.76%

19.81%

10.87%

7.41%

2.03%

4.59%

8.53%

Property insurance Travel insurance Life assurance

2012 47.96%

18.31%

11.48%

7.96%

2.10%

4.88%

7.30%

MTPL Motor insurance (casco) Accident Other non- life insurance

2011

GWP BY LINES OF BUSINESS 2012/2011

3.02%

0.36%

11.37%

-2.58% -4.21%

-0.66% -3.27%

20.35%

-30.00%

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

0

20

40

60

80

100

Total MTPL Propertyinsurance

Motor insurance(casco0

Accident Travelinsurance

Other non- lifeinsurance

Life assurance

in m

illio

n M

KD

2012 2011 Relative Difference 12-11

INSURANCE MARKET OWNERSHIP STRUCTURE

83.51%

0.20%

4.03%

9.24% 3.01% Foreign legalentites

Natural persons-nonresidents

Domestic legalentities

Natural persons -residents

State

2012

0.2% 0.2% 0.2% 0.2%

80.6% 80.6% 83.3% 83.5%

9.0% 9.0% 9.4% 9.2%

6.7% 6.7% 4.1% 4.0%

3.5% 3.5% 3.0% 3.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012

State

Domestic legal entities

Natural persons -residents

Foreign legal entites

Natural persons-nonresidents

DISTRIBUTION CHANNELS

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Direct sale Ins. brokeragecompanies

Ins.agents Agencycompanies

Otherdistr.channels

Turist agencies Banks Auto Shops

51.53%

21.03% 18.69%

5.36%

2.38% 0.49% 0.43% 0.09%

45.69%

20.71% 23.12%

4.55% 3.97%

0.52% 1.00% 0.44%

2012 2011

FINANCIAL RESULTS (2012)

Non-life insurance: - €1,047 m.

Life insurance: - €1,126 m.

Total: - €2,173 m.

Profit • Non-life insurance: 7 companies

• Life insurance: 2 companies

Loss • Non-life insurance: 4 companies

• Life insurance: 2 companies

CAPITAL & REQIURED SOLVENCY MARGIN

67

73 72

17 18 18

4.0

4.1

3.9

3.8

3.9

3.9

4.0

4.0

4.1

4.1

4.2

0

10

20

30

40

50

60

70

80

2010 2011 2012

in m

illio

n E

UR

Capital and reserves Solvency margin Capital and reserves/solvency margin

TECHNICAL PROVISIONS

7 66 32

2.594 2.955 3.068

2.276

2.545 2.672

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2010 2011 2012

In m

ilion d

enars

Останати Резерви за штети

4.877

5.566 5.824

14,13%

4,64%

0 0 0 7 17 23 88

18 20

542

865

1,166

0

200

400

600

800

1,000

1,200

1,400

2010 2011 2012

In m

ilion d

enars

Преносни премии Математичка резерва

636

899

34,37%

41,35%

1.208

Other Claims provisions UPP Mathematical provisions

INVESTMENTS- TECHNICAL PROVISIONS

Non –life companies

35 38 44

38

9 14

25 41

5 4

2

2

2 2

7 3

0

10

20

30

40

50

60

70

80

90

2009 2010 2011 2012

In m

illio

n E

UR

Other

Investment funds

Corporate bond

Shares

Government securities

Bank accounts anddeposits

4 5 4 5

4 6

11

15

0

5

10

15

20

25

2009 2010 2011 2012

In m

illio

n E

UR

Government securities

Bank accounts anddeposits

Life companies

81%

85% 81%

96% 95% 97% 96%

102%

0%

20%

40%

60%

80%

100%

120%

0

10

20

30

40

50

60

70

80

90

Q1 2011Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012

In m

illio

n E

UR

Net technical provisions Investments TP % of coverage

109%

119%

103% 104%

112%

104% 106%

105%

90%

95%

100%

105%

110%

115%

120%

0

5

10

15

20

25

Q1 2011Q2 2011Q3 2011 Q4 2011Q1 2012Q2 2012Q3 2012Q4 2012

In m

illio

n E

UR

Net TP and MP Investments TP and MP % of coverage

INVESTMENTS - TOTAL

Non –life companies Life companies

58 55 54 50

13 17 27

43 5 4

2

2

0 1

1

3

10

22

22

23

2

6

17

3

0

20

40

60

80

100

120

140

2009 2010 2011 2012

In m

illio

n E

UR

Other

Loans

Real estate

National bureau

Investment funds

Corporate bond

Shares

Government securities

Bank accounts anddeposits

8 8

12 13

6

10

16

20

1

0

5

10

15

20

25

30

35

40

2009 2010 2011 2012

In m

illio

n E

UR

THE REGULATIVE FRAMEWORK

• Law on Insurance Supervision – consolidated text (“Official Gazette of the

Republic of Macedonia” No. 30/2012);

• Law on compulsory insurance in traffic (“Official Gazette of the Republic of Macedonia” No. 88/05, 70/06, 81/08, 47/11 and 135/11);

• 34 By-laws (secondary legislation acts) regulating issues with regard to licensing, accounting and financial reporting as well as risk management and supervision . • 6 by- laws were adopted in 2012

• English version of the laws can be found at www.aso.mk

CONSUMER PROTECTION- 2012

• ISA acted on cases submitted by policyholders and consumers of insurance products and services, and the results are as follows:

• 82 complaints were submitted

• 64 were resolved, of which 30 in favour of the policyholder and 34 rejected,

• 14 were without a basis for procedure, or incomplete documentation, and

• 4 are in the process of resolution.

• ISA published brochures and flyers for Agriculture insurance, Life insurance and

Household insurance.

INSURANCE MARKET CHALLENGES

• Regional project for catastrophe risk insurance where the Agency will have the function of an implementer of the project in the following period.

• Liberalization of the motor insurance and development of a legal framework in accordance with the EU standards.

• Implementation of the system of voluntary health insurance

• Implementation of the Law on payment of pension and pension benefits from fully funded pension

Thank you!

Kosta Spaseski, MSc, Head of Off-site supervision Unit

INSURANCE SUPERVISION AGENCY

Vasil Glavinov No.12, TCC Plaza, 2nd floor

1000 Skopje, Macedonia

Tel: +389 2 3254 050 Fax: +389 2 3290 240

E-mail: kosta.spaseski@aso.mk

www.aso.mk