Wiener Staditsche insurance company plans 13% growth in 2011

Branko Krstonosic

- Wiener Staditsche insurance company expects to register a 13% growth of gross revenue in 2011, which will be about 3% larger than the growth of the insurance market in Serbia - Chairman of the Managing Board of Wiener Staditsche Branko Krstonosic assessed.

He says that the growth of revenue of Wiener Staditsche in 2010 would range between 5 and 6%, the same as the growth of the insurance market in our country.

- The focus of Wiener Staditsche insurance company prior to 2015 will be equally placed on life and non-life insurance. We plan to restructure the portfolio in the non-life insurance sector and move the focus from vehicles to property. At the moment, the ratio of issued life insurance policies to issued non-life insurance policies is 40% to 60% - Krstonosic stated for eKapija.

He added that, as a consequence of the financial crisis, many clients in the life insurance sector had asked in 2010 that their initial contracts be changed, some of them had lowered their premiums, while others had withdrawn the funds invested until then.

State should help development of life insurance

According to available statistics, about 3% of population in Serbia use the life insurance services and set aside about 80 million euros per year for that type of insurance, which is about 14% of total value of the insurance market.

- Insurance companies have suggested the state introduce tax incentives for life insurance. As a result of an increased volume of business, the insurance sector would take active part in acquisition of government securities and approval of favorable loans to the state for financing of infrastructure projects. These infrastructure projects would further increase the employment rate and the state's revenue from taxes. In that way, tax incentives would increase the state's revenue in a much more favorable business environment - Krstonosic points out for eKapija.

Our interlocutor adds that such model would benefit all - the state, citizens and insurance companies that are currently struggling with low interest of population in this form of insurance.

- The essence of the model lies in the fact that the state provides tax incentives to motivate people to make a long-term investment in life insurance and plan to have incomes other than pension in the future - says Krstonosic.

The interlocutor of eKapija explains that insurance companies are mainly interested in long-term securities, that is, bonds with fixed yield whose due date is synchronized with the duration of insurance.

- By issuing such bonds, the state would get the most quality long-term sources of funds that it could use to finance large infrastructure projects - Krstonosic concludes.