Association of Insurance Companies in FBiH: We want to bring back people's habit of life and property insurance

In the first eight months of this year, 20 insurance companies operating in the Federation generated approximately 226 million KM in non-life insurance premiums and around 67 million KM in life insurance premiums. This is an increase of about 20 million KM compared to 2016. This data comes from the FBiH Insurance Supervision Agency. The Association of Insurance Companies in FBiH explains to the Patria agency that the increase in insurance is evident, but that there is still huge room for further development of the insurance company market in BiH.

„If we include the premiums generated by branches of companies from RS operating in the FBiH, it is evident that in the first eight months of 2017, 251.6 million KM of non-life insurance premium income and 69.2 million KM of life insurance premiums were collected in the Federation of BiH, which indicates an increase of 8 percent in non-life and 10 percent in life insurance compared to the previous year. The insurance market in Bosnia and Herzegovina, and thus in the Federation of BiH, has significant room for further development, especially considering the premium structure where mandatory motor third-party liability insurance dominates.

With the further development of voluntary insurance types, provided that the population's awareness of the importance of insurance is raised, and with the improvement of living standards, it can be expected that citizens will start allocating more for insurance services. Because insurance is the best way for financial protection in cases when what we value most is threatened, our lives, our health, and our property,“ explain the Association of Insurance Companies in FBiH.

When asked about the habits of citizens in BiH regarding life insurance, which is voluntary, and where BiH citizens stand in relation to the region, the Association cannot provide encouraging figures at this moment.

„With life insurance premiums of around 15 euros per capita, BiH is at the bottom of the list of European countries in terms of the development of this type of insurance. Averages in developed EU countries are measured in hundreds of euros per capita, and in neighboring countries, it is somewhat lower but still incomparably higher compared to BiH. It is necessary to continue working on promoting all voluntary types of insurance at the insurance industry level, and within the Association of Insurance Companies in FBiH, we are preparing such an activity, which we will discuss more at the beginning of 2018. There used to be a habit of buying life insurance policies, and it needs to be recreated.“

On the website of the Association of Insurance Companies in FBiH, it is stated that the Association's goal, among other things, is to improve and develop the insurance market in FBiH. Of the 20 insurance companies in FBiH, 18 are members of the Association. Bosnia RE, as the only reinsurance company, is also a member of the Association. ATOS has never been a member of the Association, while the newly established Central osiguranje withdrew from the Association just a few months after becoming a member.

Central osiguranje stated that the Association and Central osiguranje do not have a common direction of action, and that this insurance company is withdrawing from the Association on September 21, 2017. In their notification to the Association, Central osiguranje also stated that they are ceasing to be its member because the Association is adopting certain acts that this insurance company considers to be contrary to legal regulations.

When asked why the Association's goals align with all insurance companies in FBiH, but not with Central osiguranje, the Association explains:

„The answer to the question should primarily be sought from insurance companies that are not our members but operate in the Federation of BiH. What we can say from our side is that the Insurance Supervision Agency of the Federation of BiH has intensified its activities in recent months to regulate the insurance market and sanction all forms of violation of the Guidelines on the conduct of insurance companies when concluding mandatory motor third-party liability insurance contracts, which have been in force since the end of May this year. The emphasis of the Guidelines is on prohibiting the implementation of negative practices of any kind of illegal benefits to policyholders of mandatory motor third-party liability insurance. The Association, as the representative of the insurance profession, is in close coordination with the Insurance Supervision Agency on this issue and gives it full support so that the insurance market functions with strict adherence to legal and sub-legal acts. The Association's bodies have identified the existence of companies based in the Federation of BiH and companies based in the Republic of Srpska whose growth indices in the sale of motor third-party liability insurance indicatively point to possible non-compliance with the Agency's Guidelines.“

Our members have been asked to strictly and consistently apply what is stated in the Guidelines and the Memorandum of Understanding and Cooperation, which are signed by all participants in the insurance market in the Federation of BiH. The act of withdrawing from the Association at the time of implementing these activities, in which the Association is an active participant and advocate, speaks volumes in itself.“