Insurance market, insurance with double-digit premium growth and reduced claims

2025-11-27 19:06:55, Ekonomi CNA

The insurance market is growing at double-digit rates this year, supported by new mandatory vehicle insurance prices and a smaller negative exchange rate effect.

According to data from the Financial Supervisory Authority (AMF), the insurance market for the first 10 months of 2025 reached a value of gross written premiums of 22.3 billion lek, with an annual growth of 10.5%. A year earlier, at the end of the first 10 months, the growth had been 7.6%.

This year, the insurance market is being supported mainly by the accelerated growth of the main product, motor third party liability insurance, TPL. For the 10-month period, gross written premiums from this product reached 11.7 billion lek, up 14% compared to the previous year. This product brought more than 57% of gross written premiums in the Non-Life market. In part, the increase in gross written premiums is due to the new risk-based premium calculation system, which has brought an average increase in the cost of insurance premiums by approximately 6%.

On the other hand, the improvement in market growth is due to a more reduced exchange rate effect, given that a significant portion of insurance products are sold in Euros. According to the AFSA, in the first half of the year the share of gross written premiums in Euros against the total increased to 31.4%, from 33.2% for the same period a year earlier.

The depreciation of the Euro this year is slower. On an annual basis, the Euro-Lek exchange rate is declining by approximately 1.5%, while a year ago the decline was close to 7%.

At the level of market segments, the Life insurance market continues to have higher growth rates compared to the larger non-life insurance segment.

For the 10-month period, gross written premiums increased by 13.9% compared to a year earlier (a year earlier the increase had been 98.5%).

The Life Insurance market continues to rely heavily on debtor life insurance. This product accounts for almost 83% of the total volume of gross written premiums. The debtor life product is almost entirely linked to the performance of bank credit. Most banks require life insurance for long-term credit contracts. Typically, these insurance contracts are required for loans for the purpose of purchasing real estate.

The largest market segment, Non-Life insurance, for the 10-month period marked an increase of 10.3% compared to the same period last year.

The main effect was the increase in domestic TPL insurance, but another motor insurance product, CASCO vehicle insurance, is also showing double-digit growth this year. Gross written premiums for this product have increased by 10.6% compared to the previous year, supported especially by the expansion of the car rental business.

Meanwhile, property insurance against fire and natural disasters, which is also the main voluntary insurance product, is also recording modest growth this year. According to AFSA figures, gross written premiums for the 10-month period were worth a little more than 2 billion lek, with an increase of 4.5% compared to a year earlier.

On the other hand, claims paid by insurance companies this year continue to be at lower levels compared to a year ago. For 10 months, gross claims paid by insurers were worth 6.9 billion lek, 2% more compared to the 10-month period of 2024. While in Life insurance claims have marked a slight increase of 1.4%, in the Non-Life market they are showing a decline, including payments made through the Albanian Insurance Bureau./ Monitor.al