Insurance sector

The biggest insurer, Zavarovalnica Triglav, registered almost EUR720m in premiums, a figure which represents almost 35 percent of the market. The firm is followed by Adriatic Slovenica (EUR 261m) and Zavarovalnica Maribor (EUR259m), both representing just over 12 percent of the whole market.

Compared to 2009, most insurance companies registered growth with the exception of Zavarovalnica Triglav, Zavarovalnica Maribor, GRAWE and SOP. Yet even in 2009, in the immediate aftermath of the financial collapse, Slovenian the insurance sector managed to cope well.

"The growth trend continued in the Slovenian insurance market in 2009," explains Mirko Kaluža, director of the Slovenian Insurance Association. "[This confirms] both the vitality and to some degree the resilience of the market in facing the global financial crisis. Admittedly insurance companies generated only 2.7 percent more in gross insurance premiums than the previous year, but given the significant fall in general economic growth, even that result is encouraging."

Positive results

As for 2011, the results so far are promising. Zavarovalnica Triglav has posted a pre-tax profit of EUR 18.6m in the first quarter of the year, which is 26 percent more than in the same period last year. Net profit stood at EUR 12.8m. According to the company, the strong earnings stem from a consistent implementation of crisis measures and the company's investment policy. Gross premium revenues in the first three months of the year amounted to EUR 205.1m, down three percent over the same period last year, which the company attributes to the sluggish economy.

The slow economy has affected demand for life insurance, accident insurance (due to growing unemployment) and insurance of claims (due to drop in consumer loans), the firms says.

Over at Adriatic Slovenica, the country's second biggest insurer, they are looking back at a steady performance. In 2010, the firm posted a net profit of EUR 10.5m for 2010 on premiums of EUR 261m. Both figures are flat year-on-year.

"Despite the economic crisis and last year's natural disasters, Adriatic Slovenica was successful," according to chairman Gabrijel Skof.

Insurer Zavarovalnica Maribor also posted a profit in 2010 of over EUR 9m.

Adjusting to new climate

While most firms have registered good results, adjustments are planned in order to cope with changing market trends. Triglav Insurance is planning a capital increase of EUR50m, due to be decided during a shareholder meeting on 21 June. According to a call on the website of the Ljubljana Stock Exchange, the increase in share capital will be funded from retained earnings, which amounted to EUR 252.5m at the end of 2010. No new shares will be issued, so the extended share capital will be distributed among 22,735,148 ordinary shares.

The shareholders of Zavarovalnica Maribor last month also backed a EUR 12.8m capital rise which will be carried out in June. The fresh capital will raise the insurer's solvency margin in property insurance following the 2008 and 2009 heavy storms in Slovenia and increase its reserves in line with the Insurance Market Agency's September 2009 demand for a capital rise.

The Maribor-based insurance company will issue 2,238,893 fresh shares at EUR 5.7172 apiece, with existing shareholders enjoying a priority right. Following an earlier demand from the agency, Zavarovalnica Maribor was already supplied with fresh capital to the tune of EUR 14.2m before the end of October 2009.

Paying a premium

Customers are also being expected to give more capital. Some insurance companies that offer supplementary health insurance - such as Adriatic Slovenica and Vzajemna - have raised their premiums in 2011. Adriatic Slovenica blamed the growing costs of health services and a negative result from supplementary health insurance for the hike. Vzajemna must raise the premium to preserve capital adequacy, considering last year's expenditure on health services and drugs, and the projected costs for this year, according to chairman Dušan Kidrič said. He added that if the premium stayed unchanged, Vzajemna would generate a loss of some EUR 14m in 2011.
Slovenian insurance companies may have weathered the storm of economic crisis but it is clear that they are now striving to do more than simply survive - they want to prosper.