Ljubljana - Slovenia's insurance companies posted a combined net profit of EUR 210 million in 2021, an increase of 38% on the year before, in what the Insurance Oversight Agency described as a very successful year.

At a press conference on Wednesday, the agency noted that the insurance sector business was affected by the low-interest environment and the Covid-19 pandemic last year, listing inflation and cyberattacks as challenges.

"The insurance sector as a whole is stable and meets all capital adequacy requirements," the agency's director Gorazd Čibej said.

By insurance premiums as a share of GDP, which is at 5%, Slovenia last year placed 16th among the countries for which the OECD releases data, which Čibej said placed it in the middle in terms of insurance market development.

Due to the substantial growth in net revenue from insurance premiums Slovenia's two reinsurance companies also performed successfully last year. After posting a loss of EUR 8 million in 2020, they made a net profit of EUR 64 million in 2021 owing to a good financial result of investments.

Gross written premiums in property and life insurance business were up by 1.6% from 2020 to EUR 2.4 billion (EUR 1.9 billion was property insurance and EUR 528 million life insurance).

The Slovenian insurance market is concentrated between four major insurers: Triglav, Generali, Sava and Vzajemna, which controlled a combined 79.7% of the market last year.

Zavarovalnica Triglav was the market leader in property insurance with a 45% market share, followed by Zavarovalnica Sava (30.8%) and Generali (19.7%). Triglav also kept the biggest chunk of the life insurance market, ahead of Zavarovalnica Vita and Generali and Sava.

The mutual health insurer Vzajemna continued to dominate the health insurance market with a market share in excess of 40%. It is followed by Zavarovalnica Triglav and Generali.

Additional pension insurance was last year offered by Triglav, Generali, Modra Zavarovalnica and Prva Osebna Zavarovalnica along with four pension funds that in 2021 were joined by Prva Pokojninska Družba.

The agency's deputy director Nik Erker said the Covid-19 pandemic had less of an impact on insurance business than in 2020 because of the progress in digitalisation.

"On the other hand, remote access makes us all more susceptible to cyberattacks, which risk only increased with the start of war in Ukraine," Erker said, adding that cyberattacks were seen as a major risk that the insurance market was exposed to at the moment.

Another problem is rising inflation because inflationary pressures reflect in damage payments. "It means costs of damages go up, which spills out into higher premiums. Inflation also reduces the purchasing power, which also reflects in lower demand for insurance products," said Erker.