BMI's Executive Summary

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In a regional – let alone global – context Serbia is a small market. In 2012 this will still be the case. In local currency terms, we are looking for non-life premiums to grow by 17% annually. This is an acceleration relative to calendar-year 2006, when premiums rose by just 9% in local currency terms. The latest figures suggest that the growth in the extremely underdeveloped life segment is actually slowing, which is broadly our expectation for the forecast period. Life premiums rose by 23% in calendar-year 2006 in local currency terms. We are looking for them to grow by 12% annually in 2007-2012.

For the first time we have looked at the different lines that make up the non-life segment. Unsurprisingly for a relatively low-income country, where insurance is underdeveloped, the non-life segment is dominated by motor insurance in general and compulsory third party motor liability (CTPML) business in particular. Figures published by the National Bank of Serbia (NBS) suggest that the increase in CTPML premiums in 2006 was entirely as a result of an increase in premium prices. The number of policies outstanding hardly grew at all. There is some evidence of downwards pressure on premium prices in the much smaller voluntary motor insurance segment.

As one might expect in a relatively underdeveloped market, claims – at around RSD15,000mn annually – are running at well below premiums. The competitive landscape is such that most market participants can and do achieve significant technical profits. This may change. The long-running privatisation of DDOR Novi Sad, the second-largest player (with an overall market share of around 30%) should be completed later in 2007. A long list of foreign insurers, some of whom have anyway established a presence in Serbia, have indicated an interest in participating in the likely auction. In the meantime, the number of foreign insurers who are competing in the market is quite large relative to the current and potential opportunity. Some of the names – Wiener Städtische, Grawe and UNIQA, for instance – are Austrian groups with aspirations to build major regional businesses across Central and Eastern Europe. Others – such as Merkur, Basler/Baloise and Crédit Agricole Insurance – are perhaps less expected. The largest foreign-owned player is Delta Generali Osiguranje.

In the meantime, the NBS is reassured by the growth in assets and capital of the insurance sector over the last two years or so. It appears that everyone is gearing up for a general expansion in business. In early 2007 the life segment, and the new Voluntary Pension Funds in particular, was the focus of a lot of media comment and excitement. Unlike the non-life segment, and the insurance sector as a whole, the life segment is dominated by foreign owned insurers. DDOR Novi Sad and Dunav Osiguranje, the stateowned group that is the largest insurer overall, account for less than 20% of life premiums. The life segment remains tiny. The net asset value of the Voluntary Pension Funds is still less than US$20mn. Seven companies have been granted licences to manage the new Voluntary Pension Funds. Over the long term the insurance sector should be a significant beneficiary of Serbia's ultimate membership of the WTO and the EU. In the meantime, however, the status of Kosovo remains an obstacle to the country's joining either of these international bodies.

Contents of the Serbia Insurance Report

The Sector At A Glance

Table: Overview Of The Serbian Insurance Sector

Key Insights On The Insurance Sector Of Serbia

SWOT Analysis

Serbia Insurance Industry SWOT

Key Features Of This Report

Latest News

Table: Analysis By Lines

Projections And Forecasts

Table: Premium Growth, 2005-2012

Projections And Drivers Of Growth

Table: Growth Drivers

Country Update

Macroeconomic Outlook

Table: Serbia – Economic Activity

Political Outlook

Insurance Business Environment Ratings

Table: Serbia – Insurance Business Environment Indicators

Table: Central And Eastern Europe Insurance Business Environment Rankings

Regional Context

Table: Non-Life Premiums In A Regional Context, 2007

Table: Life Premiums In A Regional Context, 2007

Table: Comparison Of Major Lines As % Non-Life Premiums, 2006

Analysis Of Competitive Conditions

Serbia – Non-Life Segment

Table: Presence Of Cross-Border Insurers, Non-Life

Serbia – Life Segment

Table: Presence Of Cross-Border Insurers, Life

Methodology

Basis Of Projections

Insurance Business Environment Rating

Table: Insurance Business Environment Indicators And Rationale

Table: Weighting Of Indicators

Competitive Landscape for Europe Insurance Reports: Sample of
    Companies Ranked

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A cross-border overview of key players and their insurance market share across Europe. Tables and graphs show country presence of multinationals across the region. Comparative company analyses and rankings by premium income (life and non-life). Company SWOTS for leading life and non-life insurers, covering network of offices, presence of foreign stakeholders, strategic relationships, joint ventures; portfolio of clients; diversity of product range; profit growth, investment strategy and risk exposure.

Network of Insurance Sources

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BMI's European Insurance Reports are based on an extensive network of multilateral organisations, government departments, insurance industry associations, chambers of commerce and company reports. Information sources include:

Read about our other Insurance Reports