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CEE, CIS and SEE insurance markets in 2011

CEE, CIS and SEE insurance markets in 2011. XPRIMM Insurance Report FY2011. 32 countries: CEE, SEE, CIS Full length statistics in EUR and national currency on www.xprimm.com. Macroeconomic view. CEE - 5.3% GDP growth in 2011 according IMF Diverging results across the region:

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CEE, CIS and SEE insurance markets in 2011

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  1. CEE, CIS and SEE insurance markets in 2011

  2. XPRIMM Insurance Report FY2011 • 32 countries: CEE, SEE, CIS • Full length statistics in EUR and national currency on www.xprimm.com

  3. Macroeconomic view • CEE - 5.3% GDP growth in 2011 according IMF • Diverging results across the region: • Turkey and Baltics : >5% - 7% • Bulgaria, Hungary, Czech Rep. : 1.5 – 2% • Croatia – flat • Common characteristics in most countries: • Economic slowdown in Q4 • Reasonable inflation rates • Rather high unemployment rates • Weak purchasing power of the population • Low crediting activity

  4. Macroeconomic view • CIS - 4.5% GDP growth in 2011 according Eurasian Development Bank (except Georgia). • Diverging results across the region: • Turkmenistan : 9.3% • Russia, Ukraine, Moldova and Azerbaijan : 4 – 4.5% • Common characteristics in most countries: • Raising inflation rates • High unemployment rates • Weak purchasing power of the population • Turkey - 7.6% GDP growth in 2011 • Greece - 4.5% GDP fall in 2011

  5. CEE insurance market PL 12% PLN  -5.4% GWP nominal change in EUR HU 12% HUF  -13.3% GWP nominal change in EUR GWP evolution depends on the GDP growth model

  6. CEE Consolidated indicators • GWP: EUR 31.97 billion <-> -4% nominal change • Weighted growth rate (local currencies): +2.11% • Paid claims: EUR 18.6 billion (Slovakia excepted) • Insurance density: EUR 253/capita (~4% down) CEE AVERAGE EUR 253/capita

  7. CEE Market shares • Almost unchanged market shares Poland 41.06  40.47 Czech Rep.  Hungary 9.08 8.20 Slovakia 6.056.60 Slovenia 6.29 6.54 Romania 5.92 5.74

  8. CEE Market portfolio • Life insurance: 45.6% • Non-life insurance : 54.5%

  9. CEE Life insurance • 45.6% of CEE portfolio (-1pp y-o-y) • GWP: EUR 14.58 billion -> 6% y-o-y decrease • Best dynamic: Albania (25%), Macedonia (40%) • Worst dynamic: Latvia (-24%), Estonia (-13.8%) and Hungary (-11%) • Insurance lines: • Traditional life insurance – negative trend • Unit-Linked – positive evolution in most countries (+1.6pp weight in CEE portfolio; +4.3pp weight in life insurance GWP) • Perspectives: almost no chances for reinstating or adopting fiscal incentives

  10. CEE Life insurance Life insurance dynamic 2011 +2% +102% Paid claims growth rate +92% UL insurance weight in life segment and dynamic 2011 +56%

  11. CEE Property insurance • 12% of CEE portfolio (< +1pp y-o-y) • GWP: EUR 3.83 billion -> 2.6% y-o-y increase • Paid claims: EUR 1.6 billion -> -28% y-o-y decrease • Latvia and Lithuania - the only CEE countries recording much higher property claims than in 2010 Weight of “fire and allied perils in line” in property segment

  12. CEE Motor insurance • 29% of CEE portfolio (< -1pp y-o-y) • GWP: EUR 9.2 billion -> 5.77% y-o-y decrease • Paid claims: EUR 5.5 billion -> ~8% y-o-y decrease • Trends: • Price war – “to the limit of economic acceptability” • Increasing bodily claims • Insurance fraud • high acquisitions costs

  13. CEE Motor insurance Motor Hull: Lithuania , Latvia, Albania and Bosnia – positive dynamic MTPL: 10 out of 17 countries, positive dynamic; Hungary, Romania, Albania and Czech Rep. – double digit negative dynamic

  14. CIS Consolidated indicators • GWP: EUR 33.67 billion -> 17.5% nominal change • Paid claims: ~EUR 22.5 billion -> 11.8% increase • Insurance density: EUR 122/capita (~17% up) CIS AVERAGE EUR 122/capita

  15. CIS Market shares • Russia: > 90% share;EUR 30.4 billion GWP • Ukraine: 4.03% share; EUR 1.4 billion GWP • Kazakhstan: 3.07% share; EUR 1.03 billion GWP

  16. CIS Specificities • Extreme diversity  hardly comparable markets • Complexity • Portfolio • Legislation • Ease of access for foreign undertakers • Affordability • Etc.

  17. SEE: Turkey, Greece, Cyprus • Different development stages of the insurance market • Very different dimensions • Currently, very different economic trends • Turkey: • GWP: EUR 6.9 billion – 1.9% y-o-y increase • Life insurance – cvasi underdeveloped (15.6% weight in portfolio) • Motor insurance – almost 40% weight in portfolio • Property insurance – 22% weight in portfolio • 3.72 million mandatory policies sold by TCIP in 2011 • Less than 23% coverage of 16 million housing units • a hot spot on the acquisitions map

  18. A changing landscape • PZU - preparing geographical expansion – first step, the Baltics • TRIGLAV and SAVA Re - interested to enter new markets or strengthen their presence in the current ones • Vienna Insurance Group - new acquisitions in Poland and Bosnia & Herzegovina and also intends further acquisitions in Hungary and Moldova, • different insurers and banks are targeting the Russian market • big Russian players (ROSGOSSTRAKH) - expanding in the neighboring countries • important legislative adjustments in the young markets • Solvency II regime – important challenge for the EU members

  19. We wish you successful business in FIAR ! daniela.ghetu@mxp.ro vlad.boldijar@mxp.ro

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