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ISTANBUL MARCH 2013

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Istanbul march 2013

ISTANBULMARCH 2013


Istanbul march 2013

CONTENTI. ASSOCIATION OF SERBIAN INSURERS..................................................................................................................................3A. About us............................................................................................................................................................................4-5B. Members..............................................................................................................................................................................6II. SERBIAN INSURANCE MARKET............................................................................................................................................7A. Number of insurance companies in the Serbian insurance market....................................................................................8B. Gross insurance premium....................................................................................................................................................9C. Insurance premiums of the most frequent types of insurance.........................................................................................10D. Share in total insurance premium of the most frequent types of insurance....................................................................11E. Concentration of insurance premiums in the market........................................................................................................12F. Insurance premiums by types of insurance in 2011...........................................................................................................13G. Premium share of the top five insurance companies........................................................................................................14III. MOTOR THIRD PARTY LIABILITY.......................................................................................................................................15A. Number of MTPL policies and total premium by companies in 2012...............................................................................16B. Share of MTPL premium by companies in 2012................................................................................................................17IV. INSURANCE FRAUDS – MAJOR INSURANCE PROBLEM...................................................................................................18A. Overall................................................................................................................................................................................19B. Serbian market...................................................................................................................................................................20C. Where is the „arable land“ for frauds in Serbia.................................................................................................................21D. Some typical problems.......................................................................................................................................................22E. Combating frauds...............................................................................................................................................................23V. INFORMATION CENTRE OF THE ASSOCIATION OF SERBIAN INSURERS............................................................................24A. General facts......................................................................................................................................................................25B. Protocol with Ministry of the Interior................................................................................................................................26C. Information centre and anti-fraud system.........................................................................................................................27D. Key word – Cooperation.....................................................................................................................................................28VI. BODILY INJURIES...............................................................................................................................................................29A. Key aspects/problems in the Serbian market....................................................................................................................30


Association of serbian insurers asi

ASSOCIATION OF SERBIAN INSURERS (ASI)


About us

ABOUT US

  • The Association of Serbian Insurers is the legal successor of the Association of Insurance Companies of Yugoslavia, founded in 1968.

  • The Association of Serbian Insurers is a non-profit organization which performs duties of common interest of the members of the Association, public functions granted by law, work for the improvement and development of insurance, activities in the field of professional training of personnel, initiates passing and amending laws and other regulations in the field of insurance and discusses and resolves other issues of common interest, which are entrusted to the Association by its founders and members.


Members

MEMBERS

* On December 31, 2012 there were total of 28insurance and reinsurance companies operating in Serbia, 24of them are members of the Association of Serbian Insurers.


Serbia n insurance market

SERBIANINSURANCE MARKET


Istanbul march 2013

* Apart from insurance companies, on December 31, 2012 there were also 4 companiesin Serbia engaged in reinsurance business.


Share in total insurance premium of the most frequent insurance types

Share in total insurance premium of the most frequent insurance types


Concentration of insurance premiums in the market

Concentration of insurance premiums in the market


Insurance premiums by types of insurance in 201 1

Insurance premiums by types of insurance in 2011


Premium share of the top five insurance companies

2011

2010

2011

2010

2011

2010

DUNAV

DELTA GEN.

DUNAV

28,24

1.

32,00

29,59

1.

25,55

25,24

1.

25,93

DDOR NS

WIENER ST.

DELTA GEN.

2.

20,15

21,08

2.

24,20

25,20

2.

18,73

18,51

DELTA GEN.

GRAWE

DDOR NS

3.

17,45

17,18

3.

19,34

21,28

3.

17,88

18,50

UNIQA non-life

DUNAV

WIENER ST.

4.

6,19

5,87

4.

8,20

7,47

4.

8,30

8,67

WIENER ST.

UNIQA life

UNIQA non-life

5.

5,31

5,39

5.

7,64

7,50

5.

5,21

4,90

78,36

76,51

81,11

79,11

84,92

86,69

Premium share of the top five insurance companies

TOTAL

NON-LIFE

LIFE


M otor third party liability

MOTOR THIRD PARTY LIABILITY


Number of mtpl policies and total premium by companies in 201 2

Number of MTPL policies and total premium by companies in 2012


Share of mtpl premium by companies in 201 2

Share of MTPL premium by companies in 2012


Insurance frauds major insurance problem

INSURANCE FRAUDS -MAJOR INSURANCE PROBLEM


Overall

OVERALL

  • Frauds dating back since the first insurance company was established (Friendly Society, South Caroline, USA, 1732).

  • The more insurance develops anti-frauds mechanisms, the more frauds get sophisticated – everlasting game.

  • Serious impacts/losses(annually):

    • Great Britain estimated to cca. 2 billion £

    • Germany estimated to 4 billion €

    • USA > $ 30 billion

  • Insurance Europe estimates total loss 2% of premium, insurers say even more.

INSURANCE FRAUDS ARE NOT ONLY THE INSURERS’ PROBLEM, BUT THE EVER INCREASING CRIMINALAT THE EXPENSE OF ENTIRE SOCIETY!

HONEST CONSUMERS ARE PAYING THE PRICE THROUGH HIGHER TARIFFS


Serbian market

SERBIAN MARKET

  • Frauds taking place predominantly with:

    • Casco insurance (hull insurance, motor vehicle insurance)

    • MTPL compulsory insurance

    • Property insurance

  • Frauds appearing both as:

    • Domestic

    • Cross-border

      (Usually organized groups: 8 suspects currently under proceedings before the Court in Subotica, Serbia, estimated more than €250 thousand worth of claims against eight Serbian insurers arising from the fraudulent accidents on the territory of Hungary where said Serbian citizens appear as offenders – party causing damage)

Estimated loss of 2-4 milion €annually,

quite significant for market that size!


Where is the arable land for frauds in serbia

WHERE IS THE “ARABLE LAND” FOR FRAUDS IN SERBIA?

  • When issuing an insurance policy

    Granting bonus whereas it should not be, double/false policies and different tariffs, backdating/forging of validity,etc. - involving employees and/or agents.

  • False or fraudulent accidents

    Non-existing ordeliberately caused accidents, inflated material damage,false bodily injuries, posting claims for non-existing vehicles, reporting false thefts. Mostly on the ground ofEuropean Accident Report (Constat Amiable), occasionally involving police, insurer’s employees and various experts, lawyers.

  • Claim settlement

    Involvinginsurer’s employees, often in collaboration with repair services, relating mostly to material damage.

    By claimants by way of: enlarging of invoices, spare parts frauds, submitting expert’s estimation on vehicle much higher than the market one, double indemnification, non-existing or falsely enlarged bodily injuries, etc. - involving various experts and surveyors, lawyers, medical staff,etc.


Some typical problems

SOME TYPICAL PROBLEMS

  • Frauds are often very difficult to prove

  • Involvement of experts and even civil servants

  • Judicial practice approach – „off the peg“ and uniform

  • Lack of adequate or updated regulatory framework

  • Absence of cooperation with state institutions, poor coordination (insurers – police – courts).

  • Insufficient cooperation (exchange of info) between the very insures

  • Data protection restrictions

  • Lack or adequate tools (softwares), etc.


Combating frauds

COMBATING FRAUDS

  • On the individual level, most of the Serbian insurers have developedanti-fraud departments.

  • Commission for prevention of frauds in insurancehas been established within the Association of Serbian Insurers,which deals with this matter on a high expertise level,consisting of top insurance experts in anti-fraud field, also exchanging and analysing data on particular cases.

  • Both the Association and the insurers are cooperating closely with Ministry of the Interior and Courts, providing data and expertise, initiating investigations.


Istanbul march 2013

INFORMATION CENTREOF THE ASSOCIATION OF SERBIAN INSURERS

(IC ASI)

KEY TO ESTABLISHING OF ANTI-FRAUD MECHANISM


General facts

GENERAL FACTS

Information centre of the Association of Serbian Insurers (IC ASI)is established in conformity with the Law on Compulsory Traffic Insurance, with following key features:

  • Unification of all MTPL insurance data, for all licensed vehicles in Serbia;

  • It is a unique data base containing full set of information on issued insurance policies and registered claimswith full control of the issued insurance policies;

  • Car accidents data base;

  • Facilitation of implementation of Bonus/Malussystem;

  • Web portal – customer service with an objective to offer prompter insight into the accident’s details for easier settling of the claim, as it offers information about vehicles registered in Serbia which were involved in car accidents on the territory of RS, as well as information relating to claimant and guilty party;

  • It is planned to carry on with constant development of the IC ASI e.g. developing of the module for fraud revealing in MTPL insurance and to integrate it into the similar EU systems.


Protocol with ministry of the interior

PROTOCOL WITH MINISTRYOF THE INTERIOR

  • In accordance with the Law provisions, Ministry of the Interior of Republic of Serbia (MUP RS), keeps track in its electronic database of all registered vehicles in the Republic of Serbia and the data from the Police records from the scenes of accidents.

  • In order to improve the service functions of IC ASI, the Project of integration with Information system of the Republic of Serbia,Ministry of the Interior,has been launched, starting with signing of a Protocol on data exchange.

  • As part of the exchange, Republic of Serbia,Ministry of the Interior,granted access to IC ASIto data from (national) vehicle register (e.g. registration and chassis numbers, categories and types of vehicles, engine number, paint, etc.), allowing at the same time also the download of data from Policerecords from car accidents.

  • These data will be used for statistical purposes and in order to develop a System (software) against fraud.


Information centre and anti fraud system

INFORMATION CENTRE AND ANTI-FRAUD SYSTEM

  • The system is to analyze pre-defined key fraud indicators, such as: accidents that involve people that are already recorded in some previous accident in the roles of „offender“,„victim“,„witness“etc., cases of drastic difference in value of the vehicles involved, frequent appearance of one and same scene of accident, one and same police officers, and many more.

  • It shall be set as to conduct web research of the social networks and to analize data collected so to recover information on the connection between persons involved in traffic accidents, hence provide insight to possible fraudulent activities of the organized groups.

    Additional benefits:

  • The development of this project with Republic of Serbia,Ministry of the Interior, also provides technical conditions to start with the sale of the car insurance policies via Internet, which will allow customers to choose their own insurance company from which they want to buy insurance policies. That will result in restrictions on the PMVIcommission, which is one of the burning issues in the Serbian MTPL market.

  • Reduce the impact of PMVI, since for the vehicles up to 3 years of age it would be possible to complete the process of renewal of insurance and registration within the insurance companies.


Key word cooperation

KEY WORD - COOPERATION

  • Between insurers at the level of local markets

  • Between insurers and state institutions at local markets

  • Between insurers at the international level, both individually or through pre-established communication chanels/formal arrangements

  • Between insurers or groups of insurers with international institutions and organizations (Interpol, national police of various states, Insurance Europe, CoB etc.)

    PROTOCOL ON COOPERATION TO COMBAT INSURANCE FRAUD

    April 2011

    Slovenia, Croatia, Bosnia and Hercegovina (Federation and Republic of Srpska), Montengro, Serbia and Hungary

    Possible model of regional data exchange network/data base, „embryo“ of future regional anti-fraud software


Istanbul march 2013

BODILY INJURIES


Key aspects problems in the serbian market

KEY ASPECTS/PROBLEMSIN THE SERBIAN MARKET

  • Rather uneven judicial practice (differing to up to 300% depending on region)

  • The „Act on compensation of damage to persons“ of the Government of Serbia has been proclaimed void by the Constitutional Court, leaving some sort of „legal vacuum“

  • Attempts of the insurance companies to reach some consensus failed due to the significant difference in living standards and earnings in various regions of Serbia hence no interest to make compensations uniform

    * Burning issue - WHIPLASH

  • Major problem in non-material damage settlement up to 2009, both medical and judicial practice recognized subjective over objective criteria

  • Since 2009. significant change in judicial practice, no more diminished life ability on the ground of whiplash, less compensation (pain and fear in minimum amounts)


Istanbul march 2013

Thank you for your attention!


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