LIFE INSURANCE COMPANIES REMEBERED GOOD OLD DAYS OF 1995
Life insurance companies recorded a real boom in their activities during the first nine months of 2001. The aggregate premium proceeds of the 12 licensed insurers reached BGL46,246,000 by September 30, some 45% up from the same period of last year. For comparison - thoughout 2000 the gross insurance premiums amounted to BGL44,250,000 - which means that within the first three quarters of 2001 the insurance companies posted more proceeds than throughout last year.If this trend persists by the year-end, the premium proceeds of life insurance companies will exceed BGL60MLN by December 31, marking about 25% growth - a good result on the background of the last 3-4 years. However, the impressive performance for the first nine months of 2001 is far behind the golden year for life insurers - 1995 - when their premium proceeds exceeded USD90MN.The revival of life insurance in Bulgaria this year is foremost due to the tax preferences, granted to those who use the services of life insurance companeis, approved by the MPs in end-2000. Presently, however, Parliament is discussing the new taxation laws, which would eventually eliminate this preference and that would obviously influence adversely the economy of the branch. Conclusively, it could be said that life insurers reached their zenith in 2001 and can expect nothing but humble performance in future. And if bigger companies may venture to wait for better days, the smaller ones would certainly quit the business.The State Insurance Company (DZI) is again the indisputable leader on this market in 2001. Unlike 2-3 years ago when the state-run insurer was holding between 65% and 75% of the life insurance business, DZI presently tops the list again but its market share of 38.78% is much more modest. This is due to the market invasion on the part of smaller companies which have bitten off the biggers' shares in the sector and are constantly making efforts to shorten the distance between them. This does not mean that DZI has stopped its development. On the contrary, the state insurer registered some 26% rise in the collected premium proceeds during the first nine months of 2001 as compared to the same period of last year. The money equivalent of this performance is BGL17,935,000, collected in January 1 - September 30, 2001 (against BGL14,222,000 for the same period of 2000. According to the CEO of the state life insurer Vera Djambazka, the company will manage to preserve the upward trend in its development and will report at least BGL25MN in premium proceeds by the year-end. For comparison - DZI's premiums for the entire 2000 amounted to BGL20,700,000, i.e. 46.83% of the proceeds of the entire local life insurance market.In addition to the higher premium proceeds, DZI reports a considerable profit as well - around BGL954,000. It is good that clients tend to choose the classical life insurance products, including a saving element, instead of limiting themselves to the risk insurance products only. Ms. Djambazka commented in front of the BANKER weekly. Various life insurances account for more than 80% of all closed with DZI. BGL2,528,000 entered the company from saving life insurance. According to DZI's managers, however, it's a pity that the entire potential of such products as health insurances and life insurances, connected with an investment fund, has not been used sufficiently yet. These products still seem exotic for Bulgaria and are offered by DZI only. For a month or two DZI's colleagues from Orel Zhivot are making attempts to break into that market niche. Orel Zhivot is the company which rates second on the list of life insurers with the highest premium proceeds. The company's premiums for the first three quarters of this year totalled BGL14,263,000, or just BGL100,000 down from BGL14,370,000 for the entire 2000.