Development of MTPL insurance in SlovakiaJúlia Čillíková

The International Insurance Forum – IIF2012 Istanbul, Pera Palace Hotel

March 4th-5th, 2012

Contents History of MTPL Market Concentration Statistics Uninsured Cars

History of MTPL 2001 demonopolization (Act No. 381/2001 ...)

New insurance undertakings (8 undertakings) New opportunities Lack of data, no historical data – risk due to long tail

business Deficit from statutory insurance – special technical

provision 2005 Liberalization of premium

Premium should be calculated on the basis of actuarial methods so that the amount will ensure the fulfillment of all liabilities of the insurance company.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Wüstenrot poisťovňa, a. s.

UNIQA poisťovňa, a. s.

UNION Poisťovňa a.s.

KOOPERATIVA poisťovňa, a.s. Vienna InsuranceGroupKomunálna poisťovňa, a. s., Vienna Insurance Group

Groupama poisťovňa, a.s.

Genertel poisťovňa a.s. pobočka zahraničnejpoisťovneGenerali Slovensko poisťovňa, a. s.

ČSOB Poisťovňa, a. s.

AXA pojišťovna, a.s. pobočka zahraničnej poisťovne

Allianz– Slovenská poisťovňa, a. s.

Source: Slovak Bureau

Development of Market Concentration

Development of Market Concentration

Market Concentration were influenced by: Demonopolization New players Cross border insurers On-line selling of insurance

Market coverage For Top 3 insurers has decreased from 81.3% in

2006 to 71.5% in 2011 For Top 5 insurers has decreased from 91.6% in

2006 to 84.8% in 2011 Financial Crisis had no significant influence on

market Concentration

Development of written premium (millions EUR)

0

100

200

300

400

500

MTPL 157.1 197.3 304.5388.3 384.2 323.3 321.9 320.6 284.6283.5 286.0

Other motor insurance 190.4 201.3 228.8246.5 289.3 271.7 290.8 306.0 293.6276.0 265.5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: NBS

Source: NBS

Claims development (million EUR)

0

50

100

150

200

250

MTPL 121.107 137.819 159.083 162.822 159.997 162.225

Other motorinsurance

178.926 190.512 205.322 199.674 188.424 183.682

2006 2007 2008 2009 2010 2011

Source: NBS

Product ratios

0%

20%

40%

60%

80%

100%

120%

Loss Ratio (MTPL)Loss Ratio (Other Motor)

Combine Ratio (MTPL)

Combine Ratio (Other Motor)

Loss Ratio (MTPL) 32.26 66.67 63.34 42.07 39.39 50.13 43.90 58.67 55.73 54.50

Loss Ratio (OtherMotor)

70.98%

72.12%

63.17%

46.17%

75.20%

67.59%

69.91%

67.98%

65.58%

65.75%

Combine Ratio (MTPL) 65.04 88.19 82.77 64.66 64.81 77.05 69.98 86.37 84.54 83.16

Combine Ratio (OtherMotor)

103.70%

100.63%

86.24%

70.32%

101.81%

93.30%

101.62%

97.22%

95.34%

98.23%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MTPL

.00

200.00

400.00

600.00

800.00

1 000.00

1 200.00

1 400.00

1 2 3 4 5 60.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Average Loss Average Premium Loss Frequency

Other motor insurance

.00

200.00

400.00

600.00

800.00

1 000.00

1 200.00

1 400.00

1 600.00

1 2 3 4 5 6

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Average Loss Average Premium Loss Frequency

Average Loss and Premiums

Source: NBS Source: NBS

Trends in motor business Motor business is influenced by price

competition Competition pressure on premiums In 2005 were introduced dumping prices by

one insurance undertaking Pressure on claims decreasing

No significant influence of financial crisis

Number of uninsured cars

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

2006 2007 2008 2009 2010 20110.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Number of insured cars Total number of cars subject to MTPL insuranceNumber of uninsured cars % of uninsured cars

Source: Slovak Bureau

Claims for uninsured cars

0

1

2

3

4

5

6

7

2006 2007 2008 2009 2010 2011-0.05

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Claims for uninsured cars in millions EUR Y-o-Y change

Source: Slovak Bureau

Uninsured cars – possible influence of financial crisis

The number of uninsured vehicles is growing The cost of recovery of claims paid for

uninsured are rising roughly 70% of the recoveries in the trial until

by 2008 it was 40% Even owners of uninsured cars who recognize

debt and commit to repay it in installments cease to pay due to financial crisis

Claims for the uninsured cars are increasing

Other problems of MTPL business

Bonus – Malus system Bonuses are increasing Non Malus system

• Prices are continuously decreasing• Windscreen losses are increasing

Unfair sanction system for uninsured cars sanctions are lower than premium and

receivable of state budget

SummaryFinancial Crisis Price War

Market Concentration ×

Decrease of premiums ×

Decrease of claim fequency ×

Uninsured cars ×

THANK YOU FOR YOUR ATTENTION

Júlia ČillíkováNational Bank of Slovakia

Tel: 00421 2 5787 3300Fax: 00421 2 5787 1118e-mail: julia.cillikova@nbs.sk