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Compulsory insurance, companies' profits increased by 130 percent last year

2024-08-27 11:20:29Biznes SHKRUAR NGA REDAKSIA VOX

Compulsory insurance, companies' profits increased by 130 percent last year

The profit of companies from compulsory motor third party liability (TPL) insurance reached a record value last year.

The data of the supervision report from the Financial Supervision Authority (FSA) show that the balance of the technical account for the TPL domestic product was positive in the amount of 1.6 billion ALL, with an increase of 130% compared to 2022.

This was the highest profit ever reported for the product in question.

The main effect on the increase in profits from TPL insurance has been given by the increase in net earned premiums, the decrease in insurance costs, in parallel with a very small increase in expenses for claims paid. The net premium earned last year reached 9.82 billion ALL, an increase of 7.7% compared to the previous year.

Meanwhile, the reduction of operating expenses related to the product has also had an important impact. They decreased to ALL 4.7 billion, down 9% compared to a year ago.

Although operating expenses decreased, they continue to have a significantly higher value compared to claims expenses.

Claims expenses saw a slight increase last year. Gross damages paid reached 3.38 billion ALL, 3.4% more compared to the previous year. While the net claims paid (removing the part paid by reinsurers) reached ALL 2.91 billion. Up by only 0.9% compared to a year ago. The net claims-premium ratio increased very slightly to 36.14%, from 36.06% in 2022.

Still according to the AMF data, the other compulsory third-party liability motor insurance product, the green card, also brought an increase in profits last year. The technical result from this product reached 455 million ALL, with an increase of 43% compared to the previous year.

The Green Card or the International Motor Insurance Certificate covers all civil liabilities (material and health damages) that may be caused by the use of a motor vehicle abroad. Every driver of a vehicle with Albanian license plates must be equipped with a Green Card insurance policy when traveling outside Albania.

Meanwhile, the other compulsory motor insurance product, border insurance, last year brought profits in the amount of 197 million ALL, with a slight decrease of 3.4% compared to the previous year.

Compulsory motor insurance has a very high weight in the structure of gross written premiums in Non-Life insurance. For 2023, domestic insurance TPL, Green Card and Border Policy accounted for almost 67% of the gross written premiums of this market. Even the profit of these products has a determining importance in the progress of the total result of the market.

According to data from the Financial Supervision Authority (AMF), the total profit of the insurance market last year reached the value of 2.76 billion ALL or 266 million euros. Compared to a year ago, the profit of Albanian insurers has increased by almost 70%.


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