The International Insurance Forum – IIF2013The International Insurance Forum – IIF2013“Motor insurance – The road towards “Motor insurance – The road towards

profitability”profitability”

MONTENEGROMONTENEGRO

Istanbul, March 2013Istanbul, March 2013..

Association - National Bureau of Montenegro Association - National Bureau of Montenegro InsurersInsurers

• Is established on 02 April 2007 by the Decision of the Is established on 02 April 2007 by the Decision of the Assembly consisted of the representatives of 3 insurance Assembly consisted of the representatives of 3 insurance companiescompanies

• Is a legal person founded for the purpose of pursuing common Is a legal person founded for the purpose of pursuing common interests of the insurance companies performing compulsory interests of the insurance companies performing compulsory transport insurance in the countrytransport insurance in the country

• The insurance company may perform compulsory insurance The insurance company may perform compulsory insurance business only if it is a member of the Associationbusiness only if it is a member of the Association

• The Association performs its operations through the following The Association performs its operations through the following basic organizational parts:basic organizational parts:

Guarantee fund;Guarantee fund; Green Card Bureau;Green Card Bureau; Information Center.Information Center.

Guarantee fund Guarantee fund is liable for the settlement of the damages:is liable for the settlement of the damages:•caused by the use of a motor vehicle, aircraft, vessel or other caused by the use of a motor vehicle, aircraft, vessel or other means of transport for which the compulsory insurance contract has means of transport for which the compulsory insurance contract has not been concluded;not been concluded;

•due to death, injuries or impairment of health caused by the use of due to death, injuries or impairment of health caused by the use of unknown motor vehicle, aircraft, vessel or other means of transport;unknown motor vehicle, aircraft, vessel or other means of transport;

•caused by the use of motor vehicle, aircraft, vessel or other means caused by the use of motor vehicle, aircraft, vessel or other means of transport insured with the insurance company which ceased its of transport insured with the insurance company which ceased its operations or which is undergoing the bankruptcy and liquidation operations or which is undergoing the bankruptcy and liquidation proceedingsproceedings

National Bureau of Montenegro Insurers is recognized as a full National Bureau of Montenegro Insurers is recognized as a full member of International Green Card System starting from 01 member of International Green Card System starting from 01 February 2012.February 2012.

National Bureau of Montenegro Insurers acting as a Green National Bureau of Montenegro Insurers acting as a Green Card Bureau guarantees:Card Bureau guarantees:•for the compensation of the damages caused abroad by the vehicle for the compensation of the damages caused abroad by the vehicle with Montenegrin registration plates;with Montenegrin registration plates;

•for the damages caused on the territory of Montenegro by the for the damages caused on the territory of Montenegro by the vehicle with foreign registration plates.vehicle with foreign registration plates.

Legislations Legislations • LOW ON LOW ON INSURANCEINSURANCE,, Official Gazette of the Republic of Official Gazette of the Republic of

Montenegro, No 78/06 of 22 December 2006, Montenegro, No 78/06 of 22 December 2006, Amendments Amendments

19/07 of 2 April 2007: Official Gazette of Montenegro, No 53/09 of 7 August 19/07 of 2 April 2007: Official Gazette of Montenegro, No 53/09 of 7 August 2009, 2009,

73/10 of 10 December 2010, 73/10 of 10 December 2010,

40/11 of 8 August 2011, 40/11 of 8 August 2011,

45/12 of 17 August 201245/12 of 17 August 2012

• LAW ON BANKRUPTCY AND LIQUIDATION OF INSURANCE LAW ON BANKRUPTCY AND LIQUIDATION OF INSURANCE COMPANIESCOMPANIES, , Official Gazette of Montenegro, nOfficial Gazette of Montenegro, no.o. 11/07 11/07 ofof 13 13 December 2007December 2007

• LAW ON COMPULSORY TRAFFIC INSURANCELAW ON COMPULSORY TRAFFIC INSURANCE,, Official Official Gazette of Montenegro, Gazette of Montenegro, no. no. 44/12 of 9 August 201244/12 of 9 August 2012

MARKET OVERVIEWMARKET OVERVIEWNumber of insurance companies Number of insurance companies

LIFETOTAL NON-LIFE

12 5 7

YEAR

2011

2012 11 5 6

Capital structureCapital structure

2011

2012*

44,989 mil €

TOTAL SHAREHOLDERS

CAPITALDOMESTIC

6,566mil €(14,60%)

FOREIGN

38,423 mil €(85,40%)

44,369 mil €10,648 mil €(24,00%)33,721 mil €(76,00%)

*01.01.2012. – 30.09.2012.

Insurance Premium

The first three companies

The leading company

2011

72,36% of total premium

45,37 % of total premium

Gross insurance premium 64,791,699.00 €

2012

66,817,737.58 €

71,28% of total premium

40,83% of total premium

Written gross premium

2011 9,056 55,734 64,791

2012 9,457 57,359 66,817

0,401

1,625

2,026

Year Life Non-Life Total

mil EUR

Portfolio structure in 2012Portfolio structure in 2012

Gross premium of life insurance companies Gross premium of life insurance companies in 2012in 2012

Insurance company

Sum in €

Grawe insurance

4,685,915

Uniqa life insurance

1,574,896

Lovćen life insurance

1,411,886

Merkur insurance

969,726

Wiener Stadtische

640,411

Atlas Life 175,164

TOTAL 9,457,999

Gross premium of non-life insurance Gross premium of non-life insurance companies for 2012companies for 2012

Insurance company

Sum in €

Lovćen insurance

27,279,698

Sava Montenegro

10,872,823

Delta Generali insurance

9,481,022

Uniqa non-life insurance

7,813,748

Swiss insurance

1,912,449

TOTAL 57,359,739

Motor Insurance MarketMotor Insurance MarketYear MTPL Premium

in €Index

2010 28.332.362 90,96

2011 30.032.678 106,00

2012 31.467.909 104,78

Year Number of paid MTPL claims

Amount of paid MTPL claims in €

2009 7.660 15.130.067

2010 7.427 12.300.260

2011 7.897 12.644.491

MTPLMTPL premium in 2012 premium in 2012In structure of non-life gross premium the largest share has compulsory insurance in the precent of 49,73, and in structure of compulsory insurance premium still dominates participation of MTPL insurance premium in the precent of 94.69

* 01.01.2012. - 30.09.2012.

MTPL premiumMTPL premium

Number of insured vehiclesNumber of insured vehiclesYear Growth Index

2008 2009 2010 2011 2012 ‘09/’08

10/’09 ‘11/’10

‘12/’11

225.130

202.974

183.169

188.202

190.494

90,15 90,24 102,74 101,22

The estimation of the number of uninsured vehicles is 5 %.

Tariff system Tariff system

Low on Compulsory Insurance in Traffic (Official Gazette NoLow on Compulsory Insurance in Traffic (Official Gazette No.. 44/12) set a transitional period of five years for the 44/12) set a transitional period of five years for the liberalization of the marketliberalization of the market. .

Insurance Association is due to adopt new common tariffs for Insurance Association is due to adopt new common tariffs for minimum MTPL according to the new limits of liability. It will minimum MTPL according to the new limits of liability. It will be in use for the first five years. Imbe in use for the first five years. Implementation of the plementation of the minimum MTPL premium shall be regularly minimum MTPL premium shall be regularly monitored by monitored by SupervisorSupervisor. .

After the expiry of these five years, insurance companies are After the expiry of these five years, insurance companies are obliged to set individiually their own tariffs.obliged to set individiually their own tariffs.

Limits of LiabilityLimits of Liability

Current minimum limits of liabilityCurrent minimum limits of liability

LAW ON COMPULSORY TRANSPORT INSURANCELAW ON COMPULSORY TRANSPORT INSURANCE from 2007 from 2007Type of vehicle Personal injuries

(per accident)Material damage

(per accident)

Buses and trucks 250.000 € 100.000 €

Other categories of vehicle including unidentified vehicles

150.000 € 80.000 €

Vehicles transporting dangerous substances

300.000 € 150.000 €

New minimum limits of liabilityNew minimum limits of liabilityLAW ON COMPULSORY TRANSPORT INSURANCELAW ON COMPULSORY TRANSPORT INSURANCE from 2012 from 2012

August 2013 After august 2014

August 2015

Type of vehicle

Personal

injuries

Material damage

Personal injuries

Material damage

Personal injuries

Material damage

Buses and trucks 400.000

€200.000 € 550.000 € 300.000 € 750.000 € 500.000

€

Other categories of vehicle including unidentified vehicles

250.000 €

150.000 € 400.000 € 220.000 € 550.000 € 300.000 €

Vehicles transporting dangerous substances

450.000 €

250.000 € 600.000 € 400.000 € 800.000 € 550.000 €

General issues regarding General issues regarding settlement of bodily injuries claimssettlement of bodily injuries claims

• In 2008 In 2008 National Bureau of Montenegro Insurers hasNational Bureau of Montenegro Insurers has adopted common adopted common CCriteria riteria for the compensations of bodfor the compensations of bodilyily injuries claims in order to injuries claims in order to avoid discrepancy in avoid discrepancy in claims settlementclaims settlement between Insurance Companies and The Court.between Insurance Companies and The Court.

• Still different criteria are used by insurance companies in respect to those Still different criteria are used by insurance companies in respect to those used by the Courtused by the Court..

Example:Example:

Compensation for pain and suffering if Compensation for pain and suffering if someone someone loslosee a a close person, parents or close person, parents or spouse: according to criteria of Insurance Companies it is between 10,000€ -spouse: according to criteria of Insurance Companies it is between 10,000€ -14,000€ per person in respect of 15,000€ – 20,000€ set by Court criteria.14,000€ per person in respect of 15,000€ – 20,000€ set by Court criteria.

• It is expected that compensations will rise as the limits of liability are increased.It is expected that compensations will rise as the limits of liability are increased.

..

Thank you for your Thank you for your attention!attention!

ASSOCIATION -NATIONAL BUREAU OF MONTENEGRO INSURERSPC EUROPINT, Bulevar Svetog Petra Cetinjskog 1A/II

81000 Podgorica, Montenegro