Market conditions

The insurance business in Croatia has a strong impact on the total economic development in the country and it substantially contributes to the stability of the financial system. The dynamism of this sector ranks the insurance business among the sectors with the highest development potential. Total insurance premiums increase twice as fast as the average economic growth in the country, with life insurance growing almost four times faster (CCE, 2005). The insurance share of the Croatian financial sector’s total assets is 5.4%, which is the third-largest share, after banks (79.3%) and leasing companies (6,3%). The insurance industry’s share of gross domestic product is 3% (Banka, 2006). Currently, there are 26 licensed insurance and two re-insurance companies operating in Croatia. Table 4: Number of insurance and re-insurance companies in Croatia
Year 1995 1997 1999 2000 2001 2002 2003 2004 2005 15 20 26 28 25 24 24 27 26

Source: Insurance Companies Supervisory Authority: Insurance market in Republic of Croatia, IX./2005


Insurance company Grawe Hrvatska merged with Slavonija osiguranje and Adria osiguranje . In the middle of the nineties. there are five companies in life insurance. The companies Wiener Stadtische osiguranje and Kvarner osiguranje merged into one insurance company and now they are operating under the name Kvarner Wiener Stadtische osiguranje. Although most of the companies are registered as composite companies. seven in non-life insurance. SavaTriglav). the insurance market is highly concentrated.Insurance Company Mediteran osiguranje merged with Jadransko osiguranje. Half of them have continued operating under the same title. Allianz. The total number of 26 insurance companies in Croatia is unrealistically high so it can be expected that a further integrations process will take place along with an increase in market share of the largest insurance companies. Euroherz. In the last ten years Croatian insurance markets have been scientifically changed. for six of them life insurance represents their major activity. The newest insurance acquisitions are acquisitions of Helios osiguranje by KWSO and Libertas osiguranje by Generali. Most of them after they have been bought operate under the buyer’s name (Prima became Grawe. Figure 1: Market insurance share by written premiums (2005) Croatia osiguranje Euroherz osiguranje Allianz osiguranje Jadransko osiguranje Osiguranje Zagreb Other Source: Banka magazine. The top 5 insurance companies according to gross written premiums are Croatia osiguranje. Some of them ceased to operate. while the other six have large shares of non-life insurance products in their portfolio. some were merged while others were acquisitioned by stronger companies and do not exist any more as such. Adriatic-Allianz. Despite a great number of insurance companies.By type of activity. Their market share in 2005 was 73. there were sixteen insurance companies in Croatia while ten years after that the number has considerably changed. The growth and stability of insurance markets were also influenced by integration processes in terms of mergers of insurance companies for joint performance on the market. Jadransko osiguranje and Osiguranje Zagreb. twelve companies that offer both life and non-life insurance and two re-insurance companies.5% of total gross written premiums. January 2006 641 .

However. It is the only remaining insurance company under state ownership. Nevertheless. amounting to over 50%. Fourteen insurance companies are majority-owned by foreigner. Croatia osiguranje is a leader in agricultural insurance with a share in gross premium of about 70% in crop and 60% in livestock insurance. In 2006. the company has stopped this negative trend by changing its business strategy (Privredni vjesnik. Although a leader. which owns 81 percent of the company. . their share of the life insurance portfolio is considerable. However. its market share has decreased steadily during the last several years. public or mutual insurance companies). The arrival of foreign investors in the domestic insurance market has also had an impact on the development of insurance activities. trained agronomists). The Croatian Government. foreign companies´ share of the total insurance portfolio considering written premium does not exceed 25%. It has raised the competitiveness of Croatian insurance companies. announced a plan of privatization untill the end of 2006. There is also a possible scenario of joining Croatia osiguranje with the Croatian Post Bank also owned by the Government.The largest insurer Croatia osiguranje holds a 40% market share (Banka. 2006). 2006). All insurance companies in Croatia are organized as joint stock companies and their founders are natural and legal persons from Croatia and legal persons from abroad. the Insurance Act permits other organisational forms (captive. Croatia osiguranje has a long tradition in agricultural insurance and a strong network of branches all around the country with skilled and experienced employees (in most of the cases. improved and increased the quality and diversity of insurance products and services.