Bosnia and Herzegovina

There were no positive economic, political, or social changes in Bosnia and Herzegovina. Even some negative trends were observed. The budget was not officially approved for the entire year, only temporary financing based on income and expenses in 2010 was utilised, which was reflected in reform processes and completely suspended Euro-Atlantic integration. Substantial short-term economic progress is not anticipated.

Political and ethnic tensions are even more pronounced than in the prior period. Following the elections of 2010, no compromise was achieved until the end of December of 2011, when the President of the Council of Ministers of Bosnia and Herzegovina was appointed. The new Council of Ministers is expected to initiate reform processes and improve political and economic environment. It is hard to be optimistic about the coming period due to the animosities and misunderstandings among political players.

The rate of unemployment remains very high. The income of the employed population is very low, which is reflected in a low purchasing power. Budget deficits are present at all levels and simultaneously the receivables from the earlier stabilisation package from the International Monetary Fund fell due. This is the reason why the credit rating of Bosnia and Herzegovina was reduced from "B+" to "B".

2011 Main Macroeconomic Indicators

Population

3.9 million

2011 Growth of GDP (estimate)

2.2%

2011 GDP (estimate)

USD 18.3 billion

2011 GDP per capita (estimate)

USD 4,715

2011 Inflation rate (retail prices)(estimate)

3.8%

Source: IMF, World Economic Outlook, September 2011, Agency for Statistics of Bosnia and Herzegovina

Insurance market

As at the end of 2010, 25 insurance companies operated in the insurance market, of which 14 were domiciled in the Federation of Bosnia and Herzegovina and 11 in the Republic of Srpska. One reinsurance company operated as well. 

Most insurance companies still do not conduct their business in line with the norms of insurance and general business ethics, and competition is not adequately controlled. The written premium was 499.4 million convertible marks, 345.9 million of which in the Federation of Bosnia and Herzegovina and 153.5 million convertible marks in the Republic of Srpska. Premium in the Federation of Bosnia and Herzegovina increased by 3.6% compared to 2010, mainly due to an 8.7% increase in premium in the Republic of Srpska. The growth of the insurance market was mainly due to the growth of life insurance premium. Non-life insurance premium accounted for 84.0% and life insurance premium for 16.0% of the total premium. 

The insurance companies domiciled in the Republic of Srpska or in the Federation of Bosnia and Herzegovina are expanding their operations to the entire territory of the Federation of Bosnia and Herzegovina. Premium the insurance companies which are domiciled in the Federation of Bosnia and Herzegovina collected in the territory of the Republic of Srpska amounted to KM 22.2 million, which is 19% more than in 2010. Premium underwritten by insurers domiciled in the Republic of Srpska in the territory of the Federation of Bosnia and Herzegovina was KM 11.4 million, or 81% more than in 2010.

Triglav Osiguranje Sarajevo remained the sixth strongest insurer in the Federation of Bosnia and Herzegovina, with 8.9% of the market. The market leader was Agram (Bosna Sunce Osiguranje and Euroherc), with a market share of 22.9%, followed by Sarajevo Osiguranje (17.0%), Croatia (10.8%) and Uniqua (10.3%).

The insurance market leaders in the Republic of Srpska were Jahorina Osiguranje, with 15.9% of the market, Dunav Osiguranje with an 11.2% market share and Bobar Osiguranje with a 10.7% portion. Triglav Osiguranje a.d., Banja Luka remained in the 7th place with a 6.6% market share, which is 0.2% less than in 2010.

In the insurance market of Bosnia and Herzegovina as a whole, the two insurance companies in the Triglav Group taken together ranked third and held 8.2% of the market.


Premium structure in the entire Bosnia and Herzegovina insurance market

 

Shares in the entire insurance market of Bosnia and Herzegovina

 
 
 
 
 
 
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