The Remaining Markets segment includes Albania, Bulgaria, Croatia, Estonia, Georgia, Germany, Hungary, Latvia, Liechtenstein, Lithuania, Macedonia, Serbia, Turkey and Ukraine. The Remaining Markets segment generated 9.6% of Group premiums.
With close to 90% of total market premiums, Albania is clearly dominated by the non-life sector, which consists of 50% mandatory and 50% voluntary insurance. Although life insurance is relatively insignificant, it nevertheless recorded an increase of approximately 25.5% in 2011. Non-life insurance, on the other hand, recorded a small decrease of 0.4% over the same period.
Vienna Insurance Group entered the Albanian market with Sigma in 2007. In addition to Albania, this non-life insurer also operates a branch office in Kosovo. VIG further consolidated its strong position by purchasing Interalbania at the end of 2010 and Intersig in 2011, and now holds second place in the overall market.
Demand remains muted in the Bulgarian insurance market, with the overall market growing only 0.5% in the first three quarters of 2011. The market is heavily dominated by motor vehicle insurance, which represents approximately 60% of total premium volume. The motor vehicle liability segment achieved excellent growth of 14.2% compared to the same period in the previous year, while motor vehicle own-damage business fell sharply (-11.3%) due to fewer new registrations and ageing of insured vehicles.
Vienna Insurance Group is represented in Bulgaria by Bulstrad Non-life, Bulstrad Life and Bulgarski Imoti Non-life. A participation is also held in Doverie, one of the largest Bulgarian pension funds. In order to make increased use of synergies and focus its market image in Bulgaria, a merger is planned for the two non-life insurance companies, Bulstrad Non-life and Bulgarski Imoti, to produce a single powerful company. Subject to official approval, Vienna Insurance Group will offer its services in the future under the Bulstrad brand, as the leading non-life insurer in Bulgaria. The merger is expected to be concluded in the first half of 2012.
Vienna Insurance Group’s market share of 14.4% puts it in first place in the overall insurance market in Bulgaria. Bulstrad Life is one of the top five in the area of life insurance.
The German insurance market performed satisfactory in 2011 in spite of the Eurozone debt crisis and a noticeable slowdown in the economy. Premium income is expected to grow 2.5% in the property and casualty segment, the highest rate since 2003. Due to the drop in single-premium business, a reduction of 5.7% is expected for the life segment as a whole.
VIG operates two companies in Germany, InterRisk Non-life and InterRisk Life. The InterRisk companies distribute exclusively through brokers. InterRisk Non-life specialises in casualty and third-party liability insurance, as well as selected property insurance products. InterRisk Life focuses on retirement provision and occupational disability solutions, as well as protection for surviving dependants. The VIG companies operate successfully in the German market as highly profitable niche providers.
Estonia, Latvia and Lithuania
The life insurance market declined both in Latvia and Estonia in 2011. Lithuania, on the other hand, recorded strong growth of 4.6% in 2011. Premiums in this segment are expected to rise again in the other two Baltic countries in 2012.
Compensa Life, formerly Seesam Life, has been a member of VIG since 2008. This life insurance company was established in the Estonian capital of Tallinn in 1993, and expanded to Latvia in 1999 and Lithuania in 2001. The sales of non-life insurance in the Baltic market began in 2010, when a branch office of the Polish Group company Compensa was established in Lithuania. VIG holds fourth place in the Estonian life insurance market with a market share of 12.3%. VIG raised its market share in the Latvian life insurance market from 7.3% in 2010 to 9.4%. The Group holds fourth place in the life insurance segment in Lithuania and seventh in the non-life segment.
The Georgian insurance market recorded an overall decline of 13.7% in the first three quarters of 2011. Although the life insurance market grew strongly, the Georgian insurance market is dominated by the non-life insurance business, which represents approximately 96% of total premium volume.
VIG has operated in Georgia since 2006. The two insurance companies GPIH and IRAO were included in the consolidated financial statements for the first time in 2010. GPIH successfully offers needs-based solutions in the non-life insurance area, including health insurance. IRAO focuses on the distribution of motor vehicle and industrial policies. The Group holds first place in the Georgian insurance market with a market share of 24%.
Due to the difficult economic situation and ongoing gloomy economic outlook, the Croatian insurance market contracted by 1.1% in 2011. The non-life (-1.1%) and life (-1.1%) segments bore equal responsibility for this decline.
VIG operates three companies, Kvarner, Helios and Erste Osiguranje, in both the life and non-life segments in Croatia, and holds fourth place in the overall market. VIG is the market leader in the life insurance segment, where it has a market share of 17.0%.
The insurance companies headquartered in Liechtenstein offer international insurance solutions. Unique access to both the European Economic Area and the Swiss market is a key benefit of the location. According to preliminary estimates, premium income for the overall market in 2011 is expected to be considerably below the level of the previous year.
VIG is represented by Vienna-Life in Liechtenstein. Vienna-Life operates exclusively in the life insurance segment and concentrates predominantly on unit-linked and index-linked life insurance. The focus is on personal insurance solutions tailored to customer needs.
The Macedonian insurance market is dominated by the non-life business, which generates approximately 95% of premiums. The overall market recorded solid growth of 9.8% in the first three quarters of 2011.
VIG has been represented in Macedonia by Winner Non-life since 2007. The company's name was changed from Sigma to Winner in 2009. VIG expanded its presence in Macedonia in 2010 by establishing the life insurance company Winner Life, which primarily distributes its products through the Erste Group company Sparkasse Bank Makedonija AD Skopje, and recorded a sharp increase in premiums of more than 60% in the first three quarters of 2011. The VIG companies have a market share of approximately 8.4%. This puts them in fifth place in the market.
The Serbian insurance market recorded moderate growth of 3.0% in the first three quarters of 2011. The motor vehicle segment, however, showed a slight decline due to falling demand for new vehicles. Like most countries in the Remaining Markets segment, the Serbian life insurance market, which currently only represents approximately 16% of total premium volume, offers great potential for future growth.
VIG has been operating in the Serbian market since 2003. Wiener Städtische Osiguranje holds second place in the life insurance segment and fifth place in the non-life segment, making it one of the leading insurance companies in the country. The company recorded excellent premium growth of 11.3% in the first three quarters of 2011.
Supported by very solid economic growth, the Turkish insurance market recorded an outstanding increase of 21.5% in 2011 due to growth in both the non-life (+21.3%) and life (+23.1%) segments.
Vienna Insurance Group is represented by Ray Sigorta in the Turkish insurance market. The company was established in 1958 and operates in the non-life insurance area, with a focus on motor vehicle insurance. VIG holds 13th place in the overall market with a market share of 1.5%.
The Ukrainian insurance market is heavily fragmented. The ten largest insurers only hold a combined market share of approximately 30%. The life insurance business continues to be very small, representing only approximately 5% of the total market. Premium volume rose by a total of 6.5% in the first three quarters of 2011.
VIG operates four insurance companies in Ukraine: UIG, Kniazha, Globus and Jupiter. The three non-life insurers, UIG, Kniazha and Globus, primarily operate in the motor vehicle insurance segment. Jupiter represents Vienna Insurance Group in the life insurance segment. The VIG companies hold fourth place in the market with a share of 3.1%, and grew faster than the market in the first three quarters of 2011.
The effects of the difficult economic situation in Hungary were also apparent in the insurance market, which recorded an overall decline of 2.7% in 2011. Non-life premium volume fell by 5.0% compared to the previous year. This decline was primarily due to lower premium volume in the motor vehicle segment. Besides motor vehicle products, non-life insurance otherwise showed a positive trend, in particular casualty insurance. Life insurance, which represents 54% of total premium volume in Hungary, showed a decline of 0.6% in premium income.
VIG is represented in Hungary by Union Biztosító and Erste Biztosító, which sells its life insurance products through the branch network of Erste Bank Hungary. Both companies performed very well in 2011, in spite of difficult conditions, and hold seventh place in the market with a combined market share of 4.8%.