Open Data Albania has conducted research on the ratio of claims paid by insurance companies against premiums paid under the insurance category. The report is based on data from the Financial Supervision Authority. At the end of 2012, the value of claims paid was 31% of premiums collected by insurance companies. The growth rate of payment of claims has been much lower than the growth rate of premiums.
Source: Financial Supervisory Authority
Processing and comments: ODA

However in 2012 it was reached the maximum value of the ratio of paid claims versus premiums collected in the past 8 years. Insurance companies paied about 2.82 billion ALL in claims, or about 26.71% more than in 2011. The biggest part of paid claims regards to motor insurance market 2.13 billion ALL, or 75.49 % of the total.

Source: Financial Supervisory Authority
Processing and comments: ODA

However insurance market continues to be extremely problematic because of the great competition in the market associated with frequent price fluctuations of insurance premiums . Local laws stipulate that market of compulsory motor insurance, which occupies the largest share in the total market, is liberalized and the price of premiums is duty of every insurance company. In these conditions, companies operate with low rates in order to maintain their market share . This is reflected with lower prices than the risk premium, pushing to a lower level of payment of claims.

Life insurance is provided to individuals and in case of their death another individual defined from the insured, receives a lot under the contract . Provision of non- life insurance includes all services that are not included in life insurance ( such as real-estate insurance, health insurance, vehicles etc.).

Source: Financial Supervisory Authority
Processing and comments: ODA
In 2012 , the market of non-life insurance, ratio of paid claims versus premiums received by insurance companies, was 32.9% . This is calculated as ratio of claims paid ( 2.64 billion ALL) versus premiums earned ( 8.04 billion ALL). Claims paid pertain to 2012, but insurance contracts may be signed before, and therefore the premiums paid on these contracts may belong to previous years.

While in the life insurance market, ratio of paid claims versus premiums received by insurance companies has been lower, only 17.98 % . This is calculated as the ratio of claims paid (158 million ALL) versus premiums earned (880 million ALL). Even in this case the premiums paid on these contracts may belong to previous years.

Source: Financial Supervisory Authority
Processing and comments: ODA


The insurance market is very important because it guarantees transfer of risk from one party to another. So individuals and businesses that do not want to carry risk, can pass it to an insurance company. This is an essential function for well-functioning of an economic and financial market in a country.