BUT CLIENTS SHOW MORE INTEREST IN COVER AGAINST UNFORESEEN ACCIDENTS

Companies pull back on insurance

THE DECLINE in production and trade during the economic crisis has been reflected in the corporate insurance market. Insurance companies report lower insured sums, reduced cover but also greater interest on the part of companies who now realise how much damage an unforeseen accident could cause them during the current difficult times.

It's best to be insured. It's best to be insured. (Source: ČTK)

THE DECLINE in production and trade during the economic crisis has been reflected in the corporate insurance market. Insurance companies report lower insured sums, reduced cover but also greater interest on the part of companies who now realise how much damage an unforeseen accident could cause them during the current difficult times.

“We are feeling the effects of the crisis in the behaviour of companies,” Petra Greksová, the spokesperson of Slovakia’s biggest insurance company, Allianz-Slovenská Poisťovňa, told The Slovak Spectator. “Corporate clients have a greater tendency to reassess insurance policies. In particular, they are reducing insured values and the extent of cover. Often these changes result from a reduction in their business activities or the real need to save funds. Similarly we have experienced a moderate increase in secondary insolvency of companies in Slovakia, since the interval of time during which clients pay insurance premiums has extended.”

Marian Bátovský, director of corporate clients' department at the Slovak arm of QBE Insurance (Europe), confirms that lower turnover in the production and trade sectors has reduced insured sums for halts to operations and for stock. In the construction sector, suspended or delayed projects have reduced insurance of construction and assembly projects.

“Some companies are cancelling insurance policies and thus transferring the risk onto themselves and their commercial partners,” said Bátovský.

Insurer Union has registered a decline in trade from transport companies whose activities are linked to transportation of goods, since many companies have reduced their production, according to Judita Smatanová, Union spokesperson.

Corporate clients have also changed their view of insurance companies.

“Companies pay more attention to the financial standing and rating of the insurer and prefer a [Standard and Poor’s] rating of at least A+,” said Bátovský.

QBE Insurance (Europe) in Slovakia recorded increased interest in management liability insurance (also known as D&O, or directors and officers liability insurance), and general liability insurance. At the beginning of this year it started providing D&O insurance, which managers particularly need when the business environment changes.

Following legislative changes related to renewable energy resources, the company has also introduced an independent product for photovoltaic power stations.

Clients of Allianz-Slovenská Poisťovňa have become more interested in insurance of assets. It said this is linked to an increased awareness by companies that insurance of assets is necessary in the event of an unforeseen accident.

Insurance companies agree that the crisis will continue to affect the market.

QBE Insurance (Europe) in Slovakia forecasts consolidation in the market; Allianz-Slovenská Poisťovňa expects that the effects of the financial crisis will persist, with a slow revival of the Slovak economy.

“As in other business sectors, so the sector of insurance will be influenced in particular by the speed with which recovery from the crisis develops, i.e. within what time frame companies are able to get back to their previous levels,” said Smatanová. “But it is possible to assume that companies will be more cautious and will ponder potential insurance risks more.”


Get daily Slovak news directly to your inbox

Theme: Finances and Advisory

Read more articles by the topic

Top stories

News digest: Foreigners’ Police departments remain closed

Slovenia has ordered PCR tests developed by Slovak scientists. Holocaust survivors received the coronavirus vaccine jab.

1 h

Slovakia has more and more vaccines available. State lacks courage

Slovakia is taking a cautious approach to make sure it will be able to deliver second doses when needed.

5 h
Police control at the border crossing in Drietomá (Trenčín Region).

Stricter curfew rules come into force, police intensify checks

Negative test result required when going to work or doing sports in nature.

7 h
The entry of new data is required via Slovensko.sk.

Companies complain about an absurd fee. They need to add information state also has

Firms have to add their representatives’ birth numbers to business register. They can be fined if they fail to do it.

7 h