Since 1 January 2022 up to date, 2 out of 10 CROBEX10 constituents outperformed the index more than 50% of the time.

For today, we decided to look at how often did each CROBEX10 constituent outperform/underperform the index. The figures relate from 1 January 2022 to date.

In the mentioned period, the CROBEX10 has observed a decrease of 10.2%, while half of the constituents outperformed the index. Of that, Atlantska Plovidba is the only constituent to actually report an increase in its share price, amounting to 9.4% YTD increase. Kočar and HT are to follow, decreasing in share price by “only” 5.6% and 5.7%, respectively. On the flip side, AD Plastik noted a biggest decrease of 51.7% due to semiconductor shortage in the EU market and the Russian geopolitical situation, where most car producers have stopped their production. This material impact has already been seen in AD Plastik’s H1 financial statements with H1 net loss amounting to HRK 59.4m due to lower sales revenue and higher costs, which also lowered operating profitability.

How much did individual constituents out/underperform the index? (YTD) (p.p.)

Source: Bloomberg, InterCapital research

Among the CROBEX 10 constituents, only two of them outperformed the index more than 50% of the time. To be specific, Atlantska Plovidba outperformed the index 50.8% of the time, followed by Atlantic Goup with 50.3% of the time. Also, Atlantska Plovidba, as previously mentioned, reported the highest YTD return among all constituents.

On the flip side, eight of ten CROBEX10 constituents underperformed the index most of the observed times. Of those, Arena Hospitality leads the list, underperforming the index 55.8% of the time. Also, we note that Arena Hospitality underperformed CROBEX10 by 11.1 p.p. YTD with only AD Plastik noting worse performance.

How often do CROBEX10 Constituents Outperform the Index? (%)

Source: Bloomberg, InterCapital research

At the end of September 2022, the Croatian insurance market increased by 7.84% YoY. Meanwhile, GWPs in Non-life insurance grew by 10.56%, while the GWPs in life insurance decreased by 0.56% YoY.

The Croatian Insurance Association, HUO, has published its latest report on the developments recorded by the Croatian insurance market, with cumulative data ending in September 2022. According to the report, the total GWPs increased by 7.84% YoY, reaching HRK 9.83bn. These values include both the insurers in Croatia as well as insurers that operate in Croatia, but are based in other EU countries (this would currently only include Sava osiguranje). The total GWP growth was driven by the growth of the Non-life insurance, which increased by 10.56% YoY (or HRK 729.2m), while at the same time, Life insurance GWPs decreased by 0.65% (or HRK 14.3m) YoY.

Total Croatia TTM (trailing twelve months) GWPs and Croatia osiguranje GWPs in September 2022 (HRKbn)

Breaking the GWPs by these segments, the 0.65% decrease in Life insurance meant that by the end of September 2022, it amounted to HRK 2.2bn. Within this segment, VIG maintains the largest market share, at 25.11%, which is an increase of 2.37 p.p. YoY. This also represents the 2nd largest increase in absolute terms, at HRK 48.7m. Following them, we have Allianz, with a market share of 19.1%, which is an increase of 3.45 p.p. YoY, and also the largest increase in absolute terms, growing by HRK 73.1m. On the other hand, Croatia osiguranje, the most prominent Croatian insurance company, has a market share of 11.3%, which is a decrease of 4.97 p.p. YoY, or in absolute terms, a decline of HRK 110.7m. However, even though this decline is severe, it is to be expected. This is due to the fact that Croatia osiguranje has decided to prioritize the more profitable non-life segment, as the life segment carries tiny margins (usually 1%), and as such, the loss of the market share in this segment, even though it influences the top line, does not influence bottom line that much. The only other insurance company which has over 10% market share in the Life segment is Agram life osiguranje, which grew its market share by 0.09 p.p., or HRkK600.7m. Meanwhile, the only other company which noted a noteworthy change in the Life segment is Generali osiguranje, which lost 2.29 p.p. of its market share, and now sits at 6.29%. This represents an absolute decrease of HRK 51.2m.

Moving on to the more profitable Non-life insurance, in total, this segment grew by 10.56% YoY, or HRK 729.2m, and amounted to HRK 6.91bn. This would mean that out of the whole, it currently represents 77.7%. Moving on to the companies themselves, in absolute terms, every insurance company on the list experienced growth. At the forefront of this growth is Croatia osiguranje, which increased its market share by 0.94 p.p., and it amounted to 29.4% by the end of September, or HRK 2.22bn. In absolute terms, this represents an increase of HRK 277.7m, and so it could be said that more than 38% of the total growth in the Non-life GWPs thus far was made by Croatia osiguranje. Following them, we have Adriatic osiguranje, which increased its market share by 0.18 p.p. to 13.04%, which in absolute terms, amounts to HRK 984.5m, or a growth of HRK 107.1m. As every Company experienced the expansion in GWPs, we can only look at the Company which expanded the slowest and thus lost the most market share. By looking at it this way, we can see that Euroherc lost the most market share, at 1.08 p.p. YoY, growing its GWPs in this segment by HRK 35.9m.

Looking at the changes by segments in Non-life insurance, in absolute terms, Insurance against civil liability in respect to the use of motor vehicles increased the most, growing by HRK 154.3m (or 6.9% YoY), followed closely by Other asset insurance, which increased by HRK 145.1m, or 18.4% YoY. Next up, we have Vehicle insurance (casco policy), which grew by HRK 132.9m, or 12.6% YoY. The other 3 categories which experienced an increase are loan insurance, which grew by HRK 55.5m, or 20% YoY, and Fire and elementary damage insurance, which grew by HRK 54.5m, or 12.6%, and finally, Health insurance, which increased by HRK 53.1m, or 9.8% YoY.

Here we can see several trends happening: Even though the vehicle and asset insurance growth is expected, as they are usually the main categories of Non-life insurance, the investments into the other 3 categories are interesting.

Loan insurance because of the current inflationary pressures, rate hikes by the ECB, and the expected loan interest rate increases in Croatia. Health insurance because of the flu, other diseases, and potentially COVID-19 complications, and as such citizens are choosing private insurance more and more, and finally, fire and elementary insurance because the risk of any of these situations happening grows as autumn begins.

Finally, looking at Croatia osiguranje current position in the market, during the last twelve months, it collected 24.03% of all GWPs, which is a decrease of 0.34 p.p. YoY. This would mean that in total, the Company’s GWPs increased by HRK 3.017bn, which is an increase of HRK 194.5m YoY.

Croatia osiguranje TTM market share (November 2010 – September 2022, %)