1. Development of MTPL insurance in Slovakia Júlia Čillíková The International Insurance Forum – IIF2012 Istanbul, Pera Palace Hotel March 4th-5th, 2012

2. Contents  History of MTPL  Market Concentration  Statistics  Uninsured Cars

3. History of MTPL  2001 demonopolization (Act No. 381/2001...)  New insurance undertakings (8 undertakings)  New opportunities  Lack of data, no historical data – risk due to long tail business  Deficit from statutory insurance – special technical provision  2005 Liberalization of premium  Premium should be calculated on the basis of actuarial methods so that the amount will ensure the fulfillment of all liabilities of the insurance company.

4. Source: Slovak Bureau Development of Market Concentration

5.  Market Concentration were influenced by:  Demonopolization  New players  Cross border insurers  On-line selling of insurance  Market coverage  For Top 3 insurers has decreased from 81.3% in 2006 to 71.5% in 2011  For Top 5 insurers has decreased from 91.6% in 2006 to 84.8% in 2011  Financial Crisis had no significant influence on market Concentration

6. Source: NBS

9. Average Loss and Premiums Source: NBS

10. Trends in motor business  Motor business is influenced by price competition  Competition pressure on premiums  In 2005 were introduced dumping prices by one insurance undertaking  Pressure on claims decreasing  No significant influence of financial crisis

11. Number of uninsured cars Source: Slovak Bureau

12. Claims for uninsured cars Source: Slovak Bureau

13. Uninsured cars – possible influence of financial crisis  The number of uninsured vehicles is growing  The cost of recovery of claims paid for uninsured are rising  roughly 70% of the recoveries in the trial until by 2008 it was 40%  Even owners of uninsured cars who recognize debt and commit to repay it in installments cease to pay due to financial crisis  Claims for the uninsured cars are increasing

14. Other problems of MTPL business  Bonus – Malus system  Bonuses are increasing  Non Malus system Prices are continuously decreasing Windscreen losses are increasing  Unfair sanction system for uninsured cars  sanctions are lower than premium and receivable of state budget

15. Summary Financial CrisisPrice War Market Concentration × Decrease of premiums × Decrease of claim fequency × Uninsured cars ×

16. THANK YOU FOR YOUR ATTENTION Júlia Čillíková National Bank of Slovakia Tel: 00421 2 5787 3300 Fax: 00421 2 5787 1118 e-mail: julia.cillikova@nbs.skjulia.cillikova@nbs.sk