BiH significantly behind other transition countries

EU assistance to the insurance sector span>

The insurance market in Bosnia and Herzegovina is not sufficiently developed and needs to be improved since it is significantly behind other transition countries in the region, Giulio Zanni, Head of the EU Delegation Office in Banja Luka, said today at a journalists’ seminar on "EU assistance to the insurance sector in BiH: Automobile liability insurance”.

Speaking at the Banja Luka event Zanni said that EU standards in the insurance sector are complex: “On one side they must allow the smooth operation of insurance companies, and on the other, they must provide developed and sophisticated models of supervision. The most important aspect is that Bosnia and Herzegovina should develop a legal framework and speed up reforms in the sector.”

He added that the EU’s 2010 Progress Report found that there has been limited progress in achieving a single insurance space in Bosnia and Herzegovina, since barriers exist which prevent companies operating freely throughout the country.

Aida Imamović of the BiH Insurance Agency noted that compulsory liability insurance affects citizens directly, either as insured policyholders or as the injured party in traffic accidents.

There are 25 insurance companies currently operating in Bosnia and Herzegovina, Imamović said, 14 in the Federation and 11 in the RS, as well as one reinsurance company, and she added that Bosnia and Herzegovina urgently needs to establish a single database on the number of vehicles and the number of registered and insured cars.

RS Insurance Agency Director Božana Šljivar said there are advantages and disadvantages in the domestic insurance market. Among deficiencies she noted that the domestic insurance market lags behind other sectors in the financial industry, and significantly behind insurance markets in other transition countries. She also noted that while the market has grown quickly  internal controls, audit and risk management systems and specialist expertise have all remained inadequate. At the same time, she said, the market displays significant elements of unfair competition.

The seminar was part of the twinning project, "EU Support for Sustainable Capacity Building in the BiH Insurance Agency and the FBiH and RS Insurance Supervisory Agencies."

The project, which began in April last year, is financed under IPA 2007 and is being implemented by the Financial Supervision Commission of Bulgaria.

 

Insurance market statistics

 

Country 2009

Premiums / capitaUSD

Premiums/GDP %

Lifetime / totalpremiums %

RS

FbiH

59

85

1,46

2,23

6,62

18,16

Serbia

108

1,80

13,64

Croatia

401

2,90

26,45

Slovenia

1.420

6,0

30,36

Austria

2.745

6,0

45,05

 

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