Recent Study: Bulgaria Insurance Report Q1 2015

The latest data from the regulator and from the leading insurers confirm our view that the prospects for Bulgaria's under-developed insurance sector remain uninspiring.

Bulgaria's insurance sector has many features in common with others in Central and Eastern Europe, although it is less developed by most metrics. The strengths include the access to capital and (if needed) reinsurance of most insurers, many of whom are subsidiaries of multi-national majors. These companies bring know-how in terms of product innovation and multi-channel distribution strategies. They are also disciplined in terms of underwriting.

However, weaknesses prevail. As in much of the region, volumes in the (vastly more important) non-life segment have been constrained by the softness of the economy and are likely to continue to be so. The competitive landscape is fragmented, which means that pressure on prices is generally downwards. This is at a time that claims losses have surged, in part because of the hailstorms in Sofia in early July 2014. Consolidation of the segment is taking place: indeed, expansion by acquisition is a clear strategy of local group Euroins.

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The life segment is at an embryonic stage of development. Premiums have been rising at double-digit rates in local currency terms (from a very low base). However, the momentum is slowing. The trade association has just launched its first nationwide campaign to boost understanding of life insurance, which is currently low. However, low household incomes remain the main challenge for the segment.

According to the regulator, non-life premiums and life premiums grew by 3% and 10% respectively in the first 10 months of 2014 relative to the previous corresponding period. The development of premiums through 2015 in USD terms is likely to be constrained by currency movements.

Recent Developments

* Severe hailstorms swept Sofia on July 8 2014, causing substantial claims losses.
* On October 13 2014, the insurers' trade...

The Bulgaria Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's Bulgaria Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Bulgarian insurance industry.

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