January the 20th, 2022 - Most companies and individuals still haven't taken out Croatian natural disaster insurance despite the devastating events of 2020 which saw both the capital and Sisak-Moslavina County in Central Croatia rocked by strong earthquakes.

As Poslovni Dnevnik/Tomislav Pili writes, despite the record amounts of premiums written out last year, the Croatian insurance sector has warned that a large number of residents, companies and the economy are still exposed to uninsured risks, especially those posed by natural disasters. As the Croatian Insurance Bureau (HUO) announced recently, the gross written premium of Croatian insurers last year reached 11.7 billion kuna, which is a significant increase of 11.86 percent when compared to the previous year.

In the non-life insurance segment, total premiums increased by 672 million kuna or 9.15 percent when compared to the previous year, while in the life insurance segment, gross written premiums increased by 8.24 percent annually, reaching 2.9 billion kuna.

"As such, with the great resilience shown by insurance companies in these extremely unstable times over the past couple of years, their stable and secure operations continued and they continued to offer strong support to people through rapid two-way communication and the payment of damages without delay even in extraordinary conditions," they said from HUO.

However, the stable contribution of insurers would be even more significant if a larger number of people had contracted some form of adequate insurance coverage, including Croatian natural disaster insurance such as that issued for earthquakes, according to the umbrella organisation of insurers. Despite the fact that the insurance market in the country is still continuing to develop, ranking third in the Croatian financial market, behind banks and mandatory pension funds, and although slight growth has been achieved, Croatia still lags significantly behind more developed countries.

"The average insurance premium per capita in Croatia last year amounted to 399 euros, while the average at the EU level stood at 2,085 euros. For example, the average insurance premium in the life insurance segment in the EU is 1163 euros, and in Croatia it's 99 euros, in the health insurance segment in the EU it reaches 248 euros, in Croatia it's only 24 euros, while in the property protection segment in the EU it is 178 euros, and in Croatia it's 59 euros, which is a consequence of a lower standard of living, but also people's poorer financial literacy,'' they claimed from HUO.

Citizen awareness

The devastating earthquakes of 2020 raised people's level of awareness, and 2021 was marked by an increase in the number of people taking out earthquake insurance, by an additional 43.4 percent in comparison to 2020.

"In the past couple of years, insurers have paid out 541 million kuna in damages, which is less than half a percent of the total damage caused by the 2020 earthquakes, which clearly indicates that the penetration of this type of insurance is still very low compared to developed markets. The Croatian Insurance Bureau (HUO) would like to warn the public that despite the two-year increase, the number of earthquake insurance policies, especially the insurance of residential buildings, is still relatively low throughout Croatia, which is especially significant in light of the fact that Croatia, along with Greece, Turkey, Macedonia and Italy, lies in the most tectonicically risky area in Europe,'' the statement said.

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