By the end of October 2022, the Croatian insurance sector grew by 7.6% YoY. Of this, GWPs in the Non-life insurance segment increased by 10.6%, while GWPs in the Life insurance segment decreased by 1.95% YoY.
Recently, the Croatian Insurance Association (HUO), published the latest report on the changes and developments which were recorded by the Croatian insurance market, with cumulative YTD data, ending in October 2022. This report can give us an insight into how well the insurance sector is doing, what are the trends, and where they might lead us. In the report, we can see that the total GWPs in Croatia increased by 7.58% YoY, amounting to HRK 10.76bn. It should be noted that this includes both insurance companies in Croatia, as well as insurers that operate in Croatia but are based in other EU countries. Currently, the 2nd category only includes Sava osiguranje. The growth in GWPs was again driven by the increase in Non-life insurance, which grew by 10.6% YoY (or HRK 804.8m). On the other hand, Life insurance GWPs decreased by 1.95% YoY, amounting to HRK 2.37bn.
Total Croatia TTM (trailing twelve months) GWPs and Croatia osiguranje GWPs in October 2022 (HRKbn)
Source: HUO, InterCapital Research
Looking at these segments more closely, in the Life insurance segment, the largest market share is held by VIG, at 24.44% of the total market, which is an increase of 2.11 p.p. YoY, or growth of 7.3%, or in absolute terms, HRK 39.3m. Following them, we have Allianz Hrvatska, with a market share of 18.8%, representing an increase of 3.2%, or growth of 18.3% (or HRK 68.5m), making this the Company which grew the most in this segment. Next up, we have the largest Croatian insurance company, Croatia osiguranje, which has a market share of 11.2%, a decrease of 4.9 p.p. YoY, or a decline of 31.7% YoY (or HRK 122.6m). Finally, the only other Company with more than 10% market share is Agrm Life osiguranje, with a market share of 10.81%, which is an increase of 0.16 p.p. YoY, which would also represent growth of 12% YoY or HRK 117.9m in absolute terms. As Croatia osiguranje is combined (both Life and Non-Life), the largest insurance company in Croatia, the decline in the Life GWPs would be worrying. However, this is a deliberate strategy by the Company, reducing their exposure to the Life segment which carries very low margins, with more focus on Non-life insurance, which brings higher margins and profitability.
Speaking of Non-life insurance, Croatia osiguranje is the largest Company in this segment, with 28.93% of the market share, an increase of 0.88 p.p. YoY. This would also represent a yearly increase of 14.2%, or HRK 297.6m in absolute terms, meaning that not only did Croatia osiguranje grow faster than the overall Non-life market (which grew by 10.6%), but it also maintained its leadership position. Next up, we have Euroherc osiguranje, with a market share of 15.11%, which is a decrease of 1.07 p.p. YoY, while in growth terms, this represents an increase of 3.32% or HRK 40.2m. This means that compared to CO, Euroherc grew, but not as fast as the overall market, leading to a market share decrease. Next up, we have Adriatic osiguranje, which has 13.28% of the total Non-life market, which is an increase of 0.16 p.p. YoY, or in growth terms, an increase of 12% or HRK 117.9m. The remaining companies all recorded increases in their GWPs, but none increased faster than the market, leading to a decrease in market share, which the above-mentioned companies capitalized on.
Breaking the Non-Life insurance segments by types of insurance, in absolute terms, the largest increase was recorded by Insurance against civil liability in respect to the use of motor vehicles, which increased by 185.9m (or 7.46% YoY). Next up, we have other asset insurance, which increased by HRK 145.6m, or 17.6%, and Vehicle insurance (casco policy), which increased by HRK 143.6m (or 12.2%) YoY. The only other insurance policies which grew by more than HRK 50m were the following: Health insurance, which grew by HRK 62.8m (or 10.4%), Fire and elementary damage insurance, which grew by HRK 57.9m (or 8.3%), and finally, Loan insurance, which grew by HRK 56.7m, or 17.8% YoY.
Here we can see a couple of things. Firstly, vehicle and asset-related insurance growth is expected. These are the types of insurance policies that were invested in over a longer time frame and given their importance, this is to be expected. Secondly, however, we can see some cyclicality, both due to the macroeconomic situation but also the weather/time of the year. The increase in Health insurance and Fire and elementary damage insurance is exactly due to said time of the year, with higher levels of diseases and higher possibilities for damage from unexpected weather events. Loan insurance, however, could also be attributed to the increasing interest rate environment, which is affecting both current and new loan issuances.
Finally, looking at CO’s current market position, during the last 12 months, the Company collected 24.01% of all GWPs, which is a decrease of 0.16 p.p. YoY. In total, this would mean that the Company’s GWPs increased to HRK 3.02bn, an increase of HRK 206.9m YoY.
Croatia osiguranje TTM market share (February 2011 – October 2022, %)
Source: HUO, InterCapital Research
