Emerging Europe: Insurance attracts a premium audience
Insurance is the latest sector to attract the attention of foreign strategic investors looking to establish a platform in Albania and the surrounding region. Guy Norton reports from Tirana.
BANKING IS NOT the only element of the financial services industry in Albania to see rising foreign direct investment. The insurance sector is also increasingly attracting interest from abroad.
As far back as 2003, for example, the European Bank for Reconstruction and Development and the International Finance Corporation each bought a 19.5% stake in Insig.
The one-time monopoly insurer had suffered a collapse in its market share to less than 20% as new entrants undercut its government-controlled tariffs. However, the introduction of a more liberal tariff regime has given it greater pricing flexibility and it is now firmly established as the third-biggest player in the country. Insig should be privatized via an open tender process later this year, with both the EBRD and the IFC stakes becoming available for sale alongside the government’s 61% holding. Alasdair Macdougall, senior banker in the financial institutions group at the EBRD in London, says: "Over the past four years we have provided Insig with extensive donor-assisted technical assistance and we would be willing to remain an investor should a strategic investor request us to."