The Montenegrin insurance market continued its upward trajectory in 2024, achieving a net profit of 12,5 million euros, an increase of 2,6 percent (400.000) compared to the previous year.
According to the Insurance Market Situation Report, prepared by the Insurance Supervision Agency (ANO) and submitted to the parliament, all nine insurance companies performed positively, and the sector remained stable, solvent and liquid, despite challenges such as inflation, slow economic growth and high interest rates. The insurers' capital was 88,7%, almost three times higher than the legal minimum, and the industry's total assets increased to 335,7 million euros.
The revenue growth is also due to a significant increase in business volume – total gross insurance premiums amounted to 134,2 million euros, a jump of 12,3 percent compared to 2023. The premium per capita amounted to 216,5 euros, while insurers paid out 60 million euros in claims, as much as 20,6 percent more than the year before. The growth in payments was contributed by an increase in the number of damage claims by almost 20 percent, with particularly pronounced growth in health and travel insurance. Non-life insurance continues to play a dominant role, while life insurance is slowly consolidating with a growing share in total premiums.
Solvent and liquid market
"The Montenegrin insurance sector in 2024 operated stably, solvently and liquidly, with a high level of promptness in resolving claims and further strengthening of the financial position, supported by growing profitability. The pronounced increase in inflation in the previous period influenced to a certain extent the growth of business expenses of insurers in Montenegro in 2024, which, together with high interest rates and the slowdown in economic growth, negatively affected the level of investments and available savings of households, and thus the demand for new insurance products," explained ANO, whose President of the Council is Marko Ivanovic.
The solvency of an insurer represents its ability to use available funds to settle all its liabilities in the amounts and on their due dates. At the end of December last year, according to ANO, insurance companies had total capital of 88,7 million euros, while the minimum legally required capital was 30,7 million, thus achieving coverage of 289,4 percent, i.e. available capital was 2,89 times higher than the prescribed minimum.
Data shows that the assets of insurance companies reached the sum of 335,7 million euros, which represents an increase of 9,2 percent compared to the comparable annual period when assets amounted to 307,5 million. As explained by ANO, the growth in the value of assets was generated, primarily, by the growth of the category "short-term financial investments".
"Short-term financial investments" at the end of 2024 amounted to 80,4 million euros, while investments in long-term securities recorded a slight decline compared to the previous period, and at the end of 2024 amounted to 181 million euros," ANO stated.
In 2022, insurers continued the investment policy from the previous period with a dominant placement of money in government bonds, which make up the largest part of the insurers' investment portfolio. At the end of December last year, 62,9 percent of aggregate market assets were invested in bonds issued by the state of Montenegro, or 211,4 million euros, of which 152,2 million were placed in long-term government bonds, and 59,2 million in short-term government bonds," ANO explained.
Government bonds are securities issued by the government, which serve to maintain the liquidity of the government budget.
Insurance premium growth
The data shows that the total gross written premium in 2024 was 1134,2 million euros, which represents an increase of 12,3 percent, or 14,7 million, compared to the premium generated in 2023, when 119,5 million euros were generated.
"The growth in total premiums of 12,3 percent compared to 2023 is the result of the growth in non-life insurance premiums in the absolute amount of 10,59 million euros, as well as the growth in life insurance premiums in the amount of 4,14 million euros," the Agency pointed out.
Observed by insurance groups, the total life insurance premium was 27,8 million and recorded a growth of 17,6 percent, while the total non-life insurance premium reached 106,4 million and achieved a growth of 11.1 percent compared to 2023. year.
"In the insurance market in Montenegro, non-life insurance accounts for a dominant share of 2024% in the total market premium in 79,3. The share of life insurance premiums is growing in 2024 and accounts for a share of 20,7% in the total market premium (an increase of 0,9 percentage points compared to 2023). Looking at insurance groups, both insurance groups achieved growth, namely the non-life insurance group by 11,1%, and the life insurance premium by 17,6%," ANO states.
ANO's analysis shows that the most common type of insurance on the market is still motor vehicle liability insurance, where 47,6 million euros in premiums were invoiced and a share of 35,4 percent in the total market premium was achieved.
In addition to this type, life insurance (18,9 percent), accident insurance (10,9 percent), other property insurance (9,1 percent) and comprehensive motor vehicle insurance (8,2 percent) made significant contributions.
"These five types of insurance accounted for 82,6 percent of the total market premium in 2024, which represents an increase of 0,6 percentage points compared to 2023 (82 percent). The aforementioned indicators indicate a high level of market concentration on a small number of types of insurance," ANO pointed out.
On the Montenegrin insurance market last year, nine insurance companies performed insurance business, of which four were for life insurance (Grave, Lovćen životno, Unika životno and Viner Štediše) and five companies were for non-life insurance (Lovćen non-life, Unika non-life, Sava, Generals and Grawe lifeless).
95.762 compensation claims resolved
Last year, insurers paid out 60 million euros based on insurance claims, which is 20,6 percent more than in 2023.
ANO says that this growth was contributed by the increase in the number of compensation claims and the increase in the costs of resolving compensation claims, due to inflationary trends in the economy.
A total of 95.762 claims were resolved.
"The total number of claims to be resolved in 2024 was 95,762 and increased by 19,3 percent compared to 2023, when it was 80.226. The growth was mainly contributed by the increase in the number of claims in non-life insurance by 14.994 (19,5%), in health insurance by 9.550 (26,1%), then in motor vehicle liability insurance by 2.420 (14,6%) and travel insurance by 1.785 (31,1%). In life insurance, the number of claims to be resolved increased by 492 claims (14,3%), and most of all in life insurance by 514 claims (20,4%)," ANO stated.
Gross settled claims in non-life insurance were 44,7 million, and in life insurance 15,3 million.
Lovćen and Sava with the largest market share
When it comes to the distribution of market shares of insurance companies, the largest market share measured by gross written premium was held by Lovćen Insurance with a 29,7 percent share (39,9 million premiums). This is followed by Sava Insurance with a 16,9 percent share (22,7 million premiums), Unika Non-Life Insurance with 14,8 percent (19,8 million euros), Generali Montenegro with 10,3 percent (13,8 million), Viner Štediše Life Insurance with nine percent (12,1 million premiums), Grave Non-Life Insurance with 7,6 percent (10,2 million premiums), Grave Insurance with 5,6 percent (7,5 million premiums), Lovćen Life Insurance with 4,9 percent (6,5 million premiums) and Unika Life Insurance with 1,2 percent (1,7 million euros).
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