Written by Jonathan Höh, Group Sales & Market Coordinator, spoke with Elnar Gashi, General Manager of GrECo Albania, about the state of Albanian insurance market.
How do the current political developments and economic conditions in Albania influence the insurance industry and clients’ risks?
The Albanian insurance market is a relatively new and emerging market. Despite that, it has been growing steadily over the years and has great potential for further growth in average terms of 10%.
Sure, the last political and economic development have influenced and led the market toward new challenges. The recent developments related to pandemics, earthquakes, war and energy crises, growing of FDI in the infrastructure and energy sector have increased the intention of the market in some other direction such as Health and Employee Benefits (EB), covering of CatNat losses and finding alternative renewable energy sources. So considering all these developments, there is a different approach and added interest from companies and businesses to buy EB products, Liabilities EAR /CAR and energy packages for diversified energy plants – PVP, HPP, and Wind Projects.
What are the biggest risks foreign companies doing business in Albania need to consider?
Albania, as a candidate country for the EU, is trying to achieve European standards to be an easy country of doing business with. All sectors are open to foreign investors and there are no legal barriers to market entry. Recently Albania has made significant reforms to ease trade and encourage foreign direct investment, including in administrative procedures, customs, business registration, licensing, payment of taxes, e-services, and e-procurement.
Nevertheless, despite efforts in that direction, there are still major challenges and risks which need to be considered:
What are the main facts of the insurance market in Albania?
The Albanian insurance market still is a small market and market-oriented on the motor mandatory product -DMTPL.
The Total Gross Premium volume of 179 MIL EUR is mainly focused in the non-life area- 92% and 8% Life.
Reinsurance almost does not exist in the Albanian market; it is represented by one local company with a restricted capacity and no rating. MTPL still dominate the market with 68% of the premiums. The main carriers on the market are Austrian companies, Uniqa and VIG who dominate more than 50% of the market.
There are in total 8 Non-Life and 3 Life Insurance companies.
As a new market with poor portfolio diversification, the competition is concentrated on MTPL
The main distribution channels for insurance products are direct sales from carriers, agents and brokers:
Recently there is an increased interest mostly from international businesses to cooperate with brokers.
Since the beginning of 2023, MAI Albania is operating under the new brand name as GrECo Albania – as the first and the only international broker in Albania.
Brokers account for about 10%of all corporate insurance sales in Albania. Is the share the same in life business?
As mentioned the Broker activity is relatively new in our market. Mostly foreign companies who have a previous culture of cooperation with brokers prefer to buy their insurance through broker service. For corporations and businesses ( for P&C ) the penetration of broker service is 10% and for the other line, this level is not the same. For life service, this level is around 2% and it is related to market orientation, while life in total is 8%. GrECo Albania, as a broker focused on P&C, is in the range of 4-5%.
After the pandemic crisis, corporations have been more sensible in their HR approach, we have an increased interest in them to complete efficient EB programs (Life, Health and Accidents). Especially more sensible in that direction have been international clients, and we have provided them with different EB packages and Health packages combined with Life or PA.
Actually, for existing EB clients and prospective ones, we are offering facilitation of EB plans by using effective online platforms such as MELP or Lifeworks. We are at the beginning and hope very soon this platform can help us to increase our EB portfolio and facilitate and to add benefits for our clients.
Please describe your incoming business servicing capabilities?
As the first international broker licensed in Albania, we have been providing our brokering service for life and non-life business and reinsurance activity.
What is important to be mentioned is that at first our business was related and based on our network requirements with a composition of more than 95% as a network client. Now, this structure is completely different with 40% Network and 60% local clients. Since 2008, as the first and the only internationally licensed broker in Albania, we have been providing our broker service for both International and domestic clients, mostly focused on P&C (construction, energy, oil industry, aviation and telecommunication).
Recently considering the last efforts and interest of the market for diversification of energy sources we are focused on the Photovoltaic energy sector. Thanks to the support of GrECo Energy, Power & Mining Practice, we are concluding placement for the first two biggest PVP in Albania – 150 MW and 50MW ( EAR /CAR EL GL S&T DSU ). In coming years, we expect the demands for such projects and other projects in infrastructure to be higher.
How many years of experience does your team have in international client servicing? Can you tell us about your most complicated case when dealing with international clients?
As the first and the only international broker in Albania, we have been providing our service to international companies who have been operating in Albania for 15 years.
Our international team has a long experience in insurance and reinsurance – more than 20 years, our international team speaks Albanian, English and Italian.
One of the most complicated cases that we have been dealing with is an Oil Industry case including B. Petroleum Albania. We have been providing our service in cooperation with JLT for this Canadian Drilling Company for more than 10 years until they changed management 4 years ago. We have been providing a full energy package for them ( PD/BI, GL, EL, OEE ). The most complicated case was 8 years ago when one of the wells blew up and created serious damage and we were involved to assist with claim procedures. It was not an easy claim, it was a very complex claim and a mixed claim between GL and OEE.
Where do you focus on when advising clients and what special expertise have you developed?
The strongest points we have been focused on to advise clients are our long-term experience and professionalism as the first international insurance broker, as well as our knowledge of local and access to international markets. Combined with our approach to consulting clients rather than selling products and our dedicated assistance in claims, we provide market-leading risk and insurance advisory in Albania.
Jonathan Höh
Group Sales & Market Coordination
T +43 664 962 39 20
Elnar Gashi
General Manager GrECo Albania
T +355 684046206
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