Motor Insurance Trends and Specifities in SE Europe

Motor Insurance Trends and Specifities in SE Europe

MARKET OF THE TRIGLAV GROUP Countries: Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Macedonia, Czech Republic Population: 30.9 million GDP per capita (Aug): USD 13,466 Size: 129,275 sq miles Everything will be alright, February 2012 2

TRIGLAV GROUP POSITION IN ADRIA REGION MARKET LEADER PLACE INSURANCE COMPANY OR GROUP GROSS PREMIUM WRITTEN (USD) m MARKETSHARE IN ADRIA REGION SOURCE: DELOITTE Average exchange USD rate 2010 *The data for Triglav, Zdravstvena Zavarovalnica is not included in Deloitte s study GROSS PREMIUM WRITTEN (USD) m NET PROFIT/LOSS IN 2010 (USD) m Everything will be alright, February 2012 3 LIFE NON-LIFE 1. Triglav Group* 1,252 22.6% 293 959 35.3 2. Croatia Group 589 10.7% 70 519 11 3. Agram Group 427 7.7% 40 387 36 4. Adriatic Slovenica 358 6.5% 18 340 11 5. Zavarovalnica Maribor 345 6.2% 94 249 15 6. Vzajemna Health 317 5.7% / 317 0.3 7. Generali Group 305 5.5% 70 235 5 8. Kvarner Vienna Insurance Group 231 4.2% 130 99 3 9. Dunav Group 199 3.6% 8 191 3 10. Allianz 183 3.3.% 62 121 11 11. Grawe Group 175 3.2% 129 46 16 12. Sava RE Group 164 3.0% 16 148 (9) 13. Merkur Group 135 2.4% 119 16 16 14. DDOR 134 2.4% 7 127 13 15. Uniqua Group 129 2.3% 43 86 1.3

MOTOR INSURANCE market share(s) of the Triglav group 2010 Market share Overall Motor (%) 2010 Market share MTPL (%) 2010 Market share Motor Hull (%) Slovenia 48% 47% 49% Croatia 5% 4% 5% Bosnia and Herzegovina 8% 7% 9% Serbia 7% 8% 3% Montenegro 48% 49% 41% Macedonia 23% 20% 30% TOTAL regions in which the Triglav group operates 23% 20% 29% 2010 Market share Overall Motor (%) 60% 50% 40% 48% 48% 30% 20% 10% 5% 8% 7% 23% 23% 0% Slovenia Croatia Bosnia and Herzegovina Serbia Montenegro Macedonia TOTAL region where Triglav group operates Everything will be alright, February 2012 4

MOTOR INSURANCE Triglav Slovenia Country: Population: Slovenia 2,0 M 2010 GWP (M ) Market Share (%) Average GWP ( ) Overall Motor 265,45 47,7% MTPL 141,11 46,6% 169 Motor Hull 124,34 48,9% Everything will be alright, February 2012 5

GP W per c apita (in US D) GP W per c apita (in US D) EXPECTED DEVELOPMENT OF INSURANCE MARKETS GDP growth and low ins. density key growth drivers on target markets 4.000 3.000 2002 2.000 1.000 - E U15 S L O MC D R OM CRO PL C ZR S E R BUL 1.000 10.000 100.000 GDP per c apita (in US D) 4.000 3.000 2.000 1.000-2010 S L O MC D BUL C ZR R OM PLCRO S E R 1.000 10.000 100.000 GDP per c apita (in US D) Everything will be alright, February 2012 6

MOTOR INSURANCE regional overview (gwp) 2010 Overall Motor Market (M ) % 2010 MTPL Market (M ) % 2010 Motor Hull (M ) % Slovenia 557,08 37% 302,87 30% 254,22 53% Croatia 498,28 33% 381,11 37% 117,18 24% Bosnia and Herzegovina 150,63 10% 120,37 12% 30,26 6% Serbia 209,24 14% 148,88 15% 60,36 13% Montenegro 35,93 2% 28,33 3% 7,60 2% Macedonia 51,19 3% 38,32 4% 12,88 3% TOTAL region where Triglav group operates 1.502,35 100% 1.019,88 100% 482,48 100% Source: Subsidiaries 600,00 500,00 400,00 557,08 2010 Overall Motor Market (M ) 498,28 300,00 200,00 100,00 0,00 150,63 Slovenia Croatia Bosnia and Herzegovina 209,24 35,93 51,19 Serbia Montenegro Macedonia Everything will be alright, February 2012 7

MOTOR INSURANCE - Insurance density (motor gwp) 300 250 200 279 Insurance density (Motor GWP) - 150 113 100 50 40 28 57 24 0 Slovenia Croatia Bosnia and Herzegovina Serbia Montenegro Macedonia Everything will be alright, February 2012 8

MOTOR INSURANCE - (Motor Hull : MTPL) ratio Motor Hull GWP : MTPL GWP 0,90 0,80 0,70 0,60 0,50 0,40 0,30 0,20 0,10 0,00 0,84 0,31 0,25 Slovenia Croatia Bosnia and Herzegovina 0,41 0,34 0,27 Serbia Montenegro Macedonia Everything will be alright, February 2012 9

MOTOR INSURANCE Distribution channels Distribution channels: Technical Check-ups Agents, commercialists, own selling points Exclusive Multiple Brokers Agencies Other Total Slovenia 56,6% 0,0% 21,0% 3,1% 16,6% 2,7% 100,0% Croatia 72,1% 0,0% 20,1% 0,8% 6,5% 0,5% 100,0% BIH - Krajina 30,0% 40,0% 27,0% 0,0% 3,0% 0,0% 100,0% BIH - Federacija 35,0% 30,0% 15,0% 3,0% 15,0% 2,0% 100,0% Serbia 40,0% 6,0% 8,9% 6,0% 39,0% 0,1% 100,0% Montenegro 5,00% 40,00% 40,00% 5,00% 10,00% 0,00 100,0% Macedonia (FYROM) 75,5% 0,0% 0,0% 22,0% 2,5% 0,0% 100,0% Source: Subsidiaries Everything will be alright, February 2012 10

MOTOR INSURANCE Region specifities in general (SLO excluded) Key characteristics: - Unfair competition - Insurance frauds - High acquisition costs - Insignificant role of supervisory agencies Trends/Challenges: - Internet sale is increasing - Individualisation of risks - Liberalisation of MTPL market - Increased activities of supervisory agencies - To decrease acquisition costs Everything will be alright, February 2012 11

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 MOTOR INSURANCE Slovenia GWP: MTPL + Motor Hull (M ) 600 500 400 300 200 100 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 GWP MTPL + Motor Hull (M ) 59 78 101 132 153 165 184 196 221 271 315 362 410 448 479 506 536 543 551 Source: Slovenian Insurance Association Everything will be alright, February 2012 12

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 MOTOR INSURANCE Slovenia 2.060 2.040 2.020 Population 2.000 1.980 1.960 1.940 population (31.12. in 000) Car density 600 500 400 300 200 100 0 number of cars per 1.000 inhabitants (31.12.) Source: Slovenian Insurance Association Everything will be alright, February 2012 13

MOTOR INSURANCE Slovene Market 600 Road Safety 500 400 300 200 100 Deaths for road traffic accidents Deaths for road traffic accidents per 1 mio inhabitants 0 Source: Slovenian Insurance Association Everything will be alright, February 2012 14

MOTOR INSURANCE Slovene Market 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 Source: Slovenian Insurance Association, Triglav Insurance Company Number of MTPL Claims 2007 2008 2009 2010 Slovenian Market 65.161 63.168 67.871 60.749 Triglav (Slovenia) 31.793 29.148 28.597 24.142 Everything will be alright, February 2012 15

MOTOR INSURANCE Slovene Market REASONS FOR DECREASE IN CLAIMS: Changes in the legislation regulating vehicle use and road traffic safety Development and construction of road infrastructure Motor vehicle safety Age structure of the population Influence of the crisis people drive less Better driving culture in general Everything will be alright, February 2012 16

MOTOR INSURANCE Slovene Market MTPL Premiums and Claims 350 300 250 200 150 100 50 0 Gross premiums written (in Mio ) Gross claims paid (in Mio ) Source: Slovenian Insurance Association Everything will be alright, February 2012 17

MOTOR INSURANCE Slovene Market Current market conditions Good results in MTPL Price war: the fight for market share Not always professional commercial approaches Lowest price guarantee (the principle of offering products always below the price of any other competitor") bonus malus system fraud Constant search for new discounts Everything will be alright, February 2012 18

MOTOR INSURANCE Slovene Market Motor Hull Premiums and Claims 300 250 200 150 100 50 Gross premiums written (in Mio ) Gross claims paid (in Mio ) 0 Source: Slovenian Insurance Association Everything will be alright, February 2012 19

MOTOR INSURANCE TRIGLAV (Slovenia) Production Product range in motor vehicle insurance was broadened in 2010 New car insurance packages brought: o o o Simplification of insurance policies Extended or added covers of insurance policies (bigger package discounts > cross-selling) Increased number of roadside assistance policies (importance of roadside assistance services on the increase) A better balance of insurance classes achieved (motor liability insurance, motor hull insurance) Everything will be alright, February 2012 20

MOTOR INSURANCE TRIGLAV (Slovenia) Production future trends More pronounced differentiation based on vehicle user age and based on the number or group of vehicle users Greater effect of loss events > new bonus-malus systems Increased weight of deductibles Growing young driver problem Pay How You Drive systems Everything will be alright, February 2012 21

MOTOR INSURANCE TRIGLAV (Slovenia) Claims: Own loss adjustment departments in all subsidiaries Better control, management, client proximity Greater client satisfaction, faster claim settlement, less fraud Use of well-established loss adjustment tools Own-developed software: o o o qualified partner automobile repair shops perform independent appraisals back-office on-line loss adjusters confirm/reject appraisal partner automobile repair shop starts with necessary repairs Everything will be alright, February 2012 22

MOTOR INSURANCE TRIGLAV (Slovenia) Fraud Prevention, Detection and Investigation Office Formation in 2010, reporting directly to the Management Board Investments in IT infrastructure Fraud Risk Analysis Main goal is prevention through effective detection and investigation Everything will be alright, February 2012 23

MOTOR INSURANCE TRIGLAV (Slovenia) Importance of technology Electronic operations: o o Introduction of E-pen Digital certificate Importance of the Central Insurance Register kept by the Slovenian Insurance Association o o Interconnection of databases and insurance registers between institutions Verification of insurance records for underwriting and loss adjustment purposes Option to advertise, offer insurance and report claims online or via smartphone (software being developed) Everything will be alright, February 2012 24

MOTOR INSURANCE TRIGLAV (Slovenia) Conclusion: Focus on customer Convenience Diversification of products, Transparency Reputation/integrity Optimise internal processes (one to many systems) Everything will be alright, February 2012 25

TRIGLAV GROUP With shared values MISSION We are building a safer future. VALUES Proffessionalism Security Corporate social responsibility VISION The vision of the Triglav Group is focused on profitability and safety of its operations. Return on Equity (ROE) will be higher than 12%. The sources of profit growth are competitive, high quality services, effective risk management and the financial stability of the Triglav Group. Everything will be alright, February 2012 26

CORPORATE SOCIAL RESPONSIBILITY SAFE DRIVING CENTRE Everything will be alright, February 2012 27

THANK YOU! Everything will be alright, February 2012