Výročná správa 2009 - Komunálna Poisťovňa

5.1. Economic environment and insurance marketYear 2009 is being described as a continuationof the financial crisis. The whole economyhas been greatly impacted by the crisis. Lastyear was the first year of new currency in Slovakia,which became the Euro. Introduction ofthe new currency was a success and it is expectedthat it will have positive impact on thecountry.Almost all EU countries have experienceda GDP decline. According to preliminary datafrom the National Bank of Slovakia the realGDP decline in Slovakia by 4.8%. Unemploymentwas rising throughout the year and CPIdropped to 1.6%. The economic slowdown hasresulted in lower rate of real wages growth.Public finances are also recorded negativetrend. The public debt has increased and thepublic finances deficit is expected at -6 % level.Financial institutions have experienced asignificant profit decline and industrial productionhas reduced by approximately 15%. Mostaffected sectors were cyclical sectors, suchas automotive industry and construction. Realestate market was also one of the casualties,resulting in price decline across the country.the European Central Bank has attemptedto prevent the worsening of economic recessionand in the first half of 2009 it has reducedthe basic interest rate to as low as 1 %.It is expected that the economic situationcould gradually improve slightly.The Slovak insurance market developmentsThe Slovak insurance market remains tohave high proportion of foreign capital, whichhad impact mainly by bringing on internationalexperiences, know-how, and introductionof new insurance products improvements offinancial strength of the insurance sector assuch. An investment by foreign shareholders inindividual insurance companies was a contributionalso in terms of adapting the sector inrelation to the membership of Slovakia in theEuropean Union.As a part of legal approximation alreadysince 2005 there is an insurance legislation inforce, which aligns fully the Slovak legislationwith EU Directives and has introduced supervisionover financial conglomerates. In addition anew law, governing the intermediation of insuranceand reinsurance services and productsand financial market supervision, came intoforce.In 2009 the insurance market was greatlyimpacted by the financial crisis. In comparisonwith 2008, which was, from the insurance standpointthe strongest yet, it was natural that thedecline has to follow.Economic situation in 2009 had a negativeimpact on the growth of non-life as well as lifeinsurance. According to the statistics almost alllife and non-life insurance segments have posteda reduction of new premium income.Impact of the crisis could be seen also inour clients’ behaviour, which was under the influenceof real consequences of the crisis andthe world economic situation, as well as a floodof information about its consequences. Thishas contributed towards high degree of cautionand lower willingness to enter into insurance­-commercial relationships.The total technical premium in 2009 reacheda value of €2.02 billion, which comparedto the same period last year was a decline by4.23%. Technical premium in non-life insurancesegment recorded a decline by 4.48%, ofwhich MTPL insurance recorded a declineby the 11.25% and the technical premium inlife insurance segment recorded a decline by4.01%.Správa predstavenstva I Management Report43