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Development of MTPL insurance in Slovakia

Development of MTPL insurance in Slovakia. Júlia 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.

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Development of MTPL insurance in Slovakia

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  1. Development of MTPL insurance in Slovakia Júlia Čillíková The International Insurance Forum – IIF2012 Istanbul, Pera Palace Hotel March 4th-5th, 2012

  2. Contents • History of MTPL • Market Concentration • Statistics • Uninsured Cars

  3. 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.

  4. Development of Market Concentration Source: Slovak Bureau

  5. 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

  6. Source: NBS

  7. Source: NBS

  8. Source: NBS

  9. Average Loss and Premiums Source: NBS Source: NBS

  10. 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

  11. Number of uninsured cars Source: Slovak Bureau

  12. Claims for uninsured cars Source: Slovak Bureau

  13. 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

  14. 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

  15. Summary

  16. THANK YOU FOR YOUR ATTENTION • Júlia Čillíková • National Bank of Slovakia • Tel: 00421 2 5787 3300 • Fax: 00421 2 5787 1118 • e-mail: julia.cillikova@nbs.sk

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