Special features of Insurance in Slovenia

How do the current political developments and economic conditions in Slovenia influence the insurance industry and clients’ risks?

PELAK: Currently we have a center-right Government, led by Slovenian Democratic Party (SDS) in coalition with three other parties. Despite a fragmented political scene, the government appears currently stable. We have a sharp economic contraction and unfortunately a return of fiscal deficits. Our GDP growth is a bit above the EU average, at 2.4% (for 2019).

This year Slovenia’s large tourism sector is exposed to weak consumer confidence across the EU and ongoing travel bans. But the COVID-restrictions also influence the supply-chains of other industries that are closely tied with the Italian, German and French Industry. This presents also a further source of vulnerability.

In which economic segments/industries do you expect increasing investments in the coming years?

PELAK: Due to COVID-19 Situation most likely everyone will be focused to stabilize their operations and planning slow investment increase. In 2021 focus will be to preserve tourism active and there will be few huge construction projects such as Highway and Railroad developments, which will also have positive influence on future operations of Slovenian Blue chips. There is also focus in digitalization and going into direction of being green and energy self-efficient.

What are the biggest risks foreign companies doing business in Slovenia need to consider?

PELAK: They should be prepare on time consuming and over demanding admin processes of public services. Foreign companies should also expect huge taxation on a labor costs but also, which might be interesting, a quite low corporate profit taxation.

How do Slovenian risks differ from those in other countries?

PELAK: Slovenia is geographically and economically well positioned to be a hub for SEE region. In four to five hours by car you can either be in in Vienna, Munich, Venice, Belgrade or Budapest. We have a very low criminal rate and therefore Slovenia is a very pleasant place for young families.

What are the main facts of the insurance market in Slovenia?

PELAK: Although we are small as a country – only 2 million citizens – we can say we are one of the best developed insurance market in SEE. Last year it was over 2,5 billion EUR collected premium, which represented 5,2% of GDP. Non-life represented 70% share of total collected premium.

In last few years we had few mergers between local insurers on the market (e.g. Triglav), ERGO and AXA XL step out from the market. So currently we as brokers are missing broader options of insurers on the market.

What specifics differ from those in other countries?

PELAK: Mostly it is almost the same as in other EU countries. A slight difference is, for example, that as a Registered Broker Legal Entity you are not allowed to deduct a VAT from income or from invoices. Additionally, as an insurance broker you have to pay 8,5% tax of each earned commission.

Brokers account for about 10% of all corporate insurance sales in Slovenia. Is the share the same in life business?

PELAK: No, it is significantly less. Most life insurances are done by Insurers or Insurance Agencies.

How about GrECo Slovenia? How does your approach differ when it comes to Employee Benefits?

PELAK: We are able to provide all services in the area of Employee Benefits our clients require. Additionally, we are focused on Specialties such as Trade Credit, Construction, Aviation, Transport and Affinity.

Can international insurance programs be implemented?

ROZEJ: Yes, they can. Sometimes it is done directly based on FOS – Freedom of Service but mostly we are being supportive to our partners as local service brokers.

How do you ensure excellent client servicing? How do you coordinate with the controlling broker?

ROZEJ: We are fully complied with GrECo service standards, which means “top notch” service provider.

Please describe GrECo Slovenia´s incoming business servicing capabilities?

PELAK: We have a team of eight people, who can handle international business. All of us are fluent in English, but we can also provide services in Italian, German, Serbo-Croatian and Macedonian language. In average the team has 8-10 years’ experience in the insurance business.

When was the last (most recent) bankruptcy of an insurance company in Slovenia? What impact did this have? How do you made preparations to minimize the effects on your clients?

PELAK: As I can remember, it never happened. The Slovenian Insurance Market is well developed and has a long lasting tradition. The majority of insurers have at least Credit Rate A (by S&P) and they are also well prepared based on Solvency II conditions.

Where do you focus on when advising clients and what special expertise have you developed?

PELAK: If we exclude international business, because most of this is already arranged by controlling brokers and we focus on our consulting them, I can say that we are eager to find or develop “tailor made” solutions for our clients. We are avoiding as much as possible using Generic Insurance or as called “Insurance solutions from the shelfs”. We are also putting a lot of energy to be specialized on claims, so we can fully support our clients in those difficult situations.

We have already implemented the Specialties Trade Credit, Construction, Aviation, Transport and Affinity.