15 May 2008 Crans Montana Forum Non – banking financial sector in Albania Great prospective of growth & development Protecting consumers Promoting markets Enforcing law

15 May 2008 Crans Montana Forum Markets regulated by Albania FSA Insurance Private pensions Securities

15 May 2008 Crans Montana Forum 2007 – “Insurance year”, paving way to a full insurance decade increase of the minimum capital in the range of EU requirements (Eur 3 mln) growth rate of 30%, substantially higher than previous years market assets increased by 17%, while liquid assets increased by 45% market solvency increased by 35% Group organization appeared for the first time for the first time, reputable investors invested in private insurance companies (Uniqa, TBIH, Aspis) full privatization of INSIG is underway and expected to complete within 2008 insurance supervision s enriched by elements of risk based supervision such as IRIS tests and ratios

15 May 2008 Crans Montana Forum Annual growth in 2007: 30%; Average annual growth in four previous years: 5%

15 May 2008 Crans Montana Forum Structure of Albanian insurance market although recently improved – market still oriented towards motor compulsory insurances; great potential to develop other non – life classes of insurance (mainly property, and liability); significant growth of the banking sector prompting for development of life insurances

15 May 2008 Crans Montana Forum Albanian insurance market – comparative statistics low penetration of insurances in both life and non-life life insurance underdeveloped: premium per capita 1.4 usd / % to GDP – 0.4 per mille insurance premiums per capita (USD)%of GDP Albania200,58 Slovenia9205,61 EU ,32

15 May 2008 Crans Montana Forum Insurance Huge development in the years to come strong growth of economy favourable environment for operations better regulation and supervision promotion of insurance products such as: liabilities of oil operators, counstuctors, hotel operators, mining, tourism, agriculture national reforms in health sector and pensions insurance programs for natural catastrophes on national basis presence of the reputable international investors, towards a better contemporary approach,good practices and business oriented policies increasing level of experience and expertise, and creation of ranges of professionals

15 May 2008 Crans Montana Forum How do Albanians invest for their own future? Pensions Question: getting older vs becoming wealthy in Albania? young population (average age – 32 ) good rate of GDP growth (5% - 7%) large potential of working force to generate money today and save for the future Answer: Optimistic view of becoming weatlhy before getting older Regulation amendments needed for pensions operations, taxation, etc.

15 May 2008 Crans Montana Forum Securities securities market becoming increasingly attractive for the domestic and foreign investors improvement in trading infrastructure (local dealers) beneficiary risk – return combination increase in term of investment (2 and 5 year emissions, and 7 year bonds ) undergoing upgrades in the clearing and settlement arrangements first benchmark bond in Euro in international capital markets forecasted in 2009

15 May 2008 Crans Montana Forum General establishment of the FSA as per the best international models, is a clear signal of consolidation and standartization of the regulatory and supervisory regime to supervise does not any more mean mainly to lead into confrontation with others, neither on the real battlefield nor in economics, but to guide the direction towards universal rule of the law the efforts paid by the FSA in enhancing the regulation and supervision of the markets are very well combined by the introduction of modern integrated IT platform, which include various IT systems such as Motor Information Center, Web based off site reporting for insurance and pensions, GSRM, etc.

15 May 2008 Crans Montana Forum Why to invest in Albanian financial sector? Political stability EU and NATO integration are the main goals of the country Positive economic outlook Increase in GDP and control over inflation Public investments, infrastructure Expansion of the banking system Optimistic expectations for the development of specific sectors like: energy, construction, tourism, mining, etc. Improved environment for businesses, tax incentives Better regulation & supervision FSA established as per the best models of integrating the non-banking financial supervision Review of regulation in compliance with international standards and EU directives, aiming to enhance the development Inclusion of risk based supervision elements, supported by IT modern platform Increase of insurance experience & expertise Increasing number of financial experts, well educated and trained Motivation of specific professions such as actuaries, accountants, claims adjusters (first class of Albanian actuaries certified in 2007)

15 May 2008 Crans Montana Forum Foreign insurance investments already here Reputable European insurers now present in Albania: Uniqa Group Austria – substantial shares in SIGAL Holding company (since 2007), with operations in life & non-life insurances in Albania, Kosova, and Macedonia TBIH Financial Services Group N.V. ( owned 60% by Vienna Insurance Group) – substantial shares in SIGMA company (since 2007) which operates in non-life insurance markets in Albania, Kosova and Macedonia, and in private pensions market in Albania Aspis Group – substantial shares in Interalbanian non life insurer in Albania Full privatization of INSIG – procedures are underway - expected to complete within 2008

15 May 2008 Crans Montana Forum Welcome to invest in Albania! Thank you Elisabeta Gjoni Chairperson – Albanian FSA