Unicredit and Triglav Leading Groups
Deloitte Adria Top 15
The leading group in the Adria region* is UniCredit, with the total assets of EUR 19.7 billion, followed by the NLB and the Intesa Sanpaolo groups. The top-ranked insurer is the Slovenian Triglav Group, with a gross premium earned of over EUR 943 million.
The largest banking groups in the Adria region* have their presence in the majority of the markets, enabling them to service regionally operating clients. In addition to UniCredit, the other of the top five leading banking groups measured by assets include NLB (EUR 16.8 million), Intesa Sanpaolo (EUR 15.8 million), Hypo Alpe-Adria (EUR 10.9 million) and RBA (EUR 10.4 billion). Adria's largest three banking groups account for around 36 percent of the region's total assets. "The aggregate assets of the Deloitte Top 15 banking groups make up over 80 percent of the total banking assets of all the region’s banking assets," says Aleksandar Knežević, Deloitte Senior Manager. Despite the negative economic trends and the economic slowdown in the Adria region, the financial services industry has managed to preserve its stability.
Despite Serbia being the largest country in the region by population size, its banking industry occupies only the third place, with its total asset level half the total banking assets in Croatia or Slovenia. The average per-capita assets place Serbia on the fifth position. The main underlying reason is a relatively weaker bank penetration, which suggests a high potential and makes the Serbian market one of the region’s most attractive and challenging markets. The largest bank in Serbia is Banca Intesa, a member of the Intesa Sanpaolo Group, followed by Komercijalna banka nad Eurobank EFG
The Croatian banking market is the largest in the region, measured by assets. As in previous years, Zagrebačka banka, a member of the UniCredit Group, remains Croatia's largest bank, followed by Privredna banka Zagreb, a member of Intesa Sanpaolo, and Erste & Steiermärkische Bank. Croatia has a distinct division between large and small banks, with its large banks holding over 82 percent of the total assets and achieving higher profit levels than the small players. The small banks are under particular pressure, caused by increasing levels of bad loans, decreasing interest margins and strengthening market competitors.
Slovenia, the only EU member in the region, tops the ranking list by the average per-capita assets. NLB is Slovenia's largest bank, with its total assets of EUR 13.8 million, followed by another two locally owned banks - Nova kreditna banka Maribor and Abanka Vipa.
There are as many as 28 banks in Bosnia and Herzegovina, despite the relatively small amount of the total banking assets. Such a situation is partly due to the Republic of Srpska being a separate entity, with some of the banking groups operating through two separate legal entities each. Three leading banks make up almost 42 percent of the total assets, which speaks of a relatively high concentration of the market leaders. Raiffeisen Bank continues to be the largest bank in Bosnia and Herzegovina, followed by UniCredit and Hypo Alpe-Adria, each operating through two legal entities.
The implementation of Basel II remains a key topic in the banking industry. At the end of the previous year, Basel II, a package of amended regulatory framework, was adopted, with the aim to strengthen capital and liquidity maintenance rules and build a more resilient banking sector. The requirements of Basel II have already been in use in Slovenia for some time, introduced in Croatia only recently, whereas its implementation in Serbia has been postponed to late 2011.
The insurance industry sees its largest players still focused on the region. However, only three out of the top ten insurances are based outside Adria, while the rest is in local hands. The Triglav Group is the leader and, thanks to its gross premium of EUR 943.5 million, its size reaches twice the size of its first follower on the list, Croatia osiguranje, whose gross premium amounts to EUR 444 million. In addition to the two insurers, the top five leading insurances of the Adria region include Agram (EUR 321.8 million), Adriatic Slovenica (EUR 270 million) and Zavarovalnica Maribor (EUR 259.5 million). A premium decline has been noted on all the markets, which is a result of forced insurance cost savings due to the economic crisis. Declining purchasing power has particularly hit the life insurance segment, which is a savings-type business and long-term in its nature.
There are a total of 22 insurers on the Serbian insurance market, which provide the country a notably higher ranking in terms of the market premium compared to Slovenia or Croatia. Serbia's top insurer is Dunav osiguranje, followed by Delta Generali osiguranje and DDOR. “Such a large number of insurances are mainly due to the country's significant growth potential in terms of its economic potency, population size and low penetration level of insurance services” comments Knežević.
The Slovenian insurance market is the most developed one in the region, as shown by its gross per-capita premium, which puts the country far ahead of the other countries in the region. The largest insurance group as well as another three of the largest five insurances in the region come from Slovenia. The biggest Slovenian insurer is Triglav, followed by Zavarovalnica Maribor and Adriatic Slovenica.
The Croatian insurance market is the second largest measured by size, but also by maturity. In 2010 Croatia's market reported a premium decline of 1.8 percent, measured in the local currency, with a somewhat more pronounced decrease in the non-life insurance business. According to the Croatian Insurers' Association, the negative trend in the non-life insurance segment continued in the first five months of 2010, with a decline of 1.6 percent. The life-insurance business also experienced a slowdown, albeit at a slightly weaker level of 1.3 percent. There are a total of 26 insurance companies in Croatia, with the first five occupying around two thirds of the total market. Croatia osiguranje is the biggest insurer, the same as last year, followed by Euroherc, a member of the Agram Group, and Allianz.
The insurance market in Bosnia and Herzegovina, measured by key maturity indicators, is at the level of the Montenegrin and Serbian markets, and accommodates an impressive number of 26 insurers due to its specific organisation and regulation. By the total premium, the insurance industry in the Federation of Bosnia and Herzegovina is somewhat larger than in the Republic of Srpska, as it is exactly where the largest insurers are based. Thus, the biggest insurance company is Sarajevo-osiguranje, followed by Bosna-Sunce and Euroherce (both members of the Agram Group).
The Montenegrin market is dominated by foreign insurers. It is also the region’s smallest market, with a total gross premium of EUR 62.5 million.
Macedonia's insurance market features the lowest maturity level in the region, as exemplified by the share of the gross premium in the country's GDP. Last year, unlike other markets, the Macedonian market saw its total premium grow by 4.8 percent. Croatia osiguranje experienced the highest growth, mostly in its non-life insurance segment where the premium rose four times, albeit from a very low base. Macedonia's largest insurer is Vardar, a member of the Triglav Group, followed by Sava Tabak, a member of the Sava Re Group.
The EU Solvency II represents the biggest challenge for the insurances in the region. Only a few insurance companies have formally committed to its implementation, with an even smaller number of those involved in QIS 5 (Quantitative Impact Study), while the levels of the risk management and governance system set-up are far behind the common practice found in EU countries.
*The Adria region comprises Serbia, Croatia, Slovenia, Bosnia and Herzegovina, Serbia,Montenegro and Macedonia.