Do Albanians pay insurance in lek or in euros? - AMF: The year 2024 ended with a decline in premiums in the European currency
Fewer Albanians are found to have paid in euros for life, car and property insurance during 2024. According to an analysis conducted by the Financial Supervisory Authority, the value of gross past premiums from life and non-life insurance reached 24 billion in the past year, while the majority are in lek and only 29.8% in euros.
Specifically, the share of premiums in euros against total gross written premiums for life insurance activity has decreased by about 2.7%, reaching 26.5%, from 29.2% at the end of 2023. Meanwhile, the share of premiums in euros against total non-life insurance activity has decreased by about 1.2% compared to the end of 2023.
Since 2017, the Ministry of Finance, the Financial Supervisory Authority and the Bank of Albania have taken several actions to reduce the use of foreign currencies in the economy according to the sectors they supervise or operate in. However, we can never talk about 100% premiums in lek in the insurance market, because there are some products that are issued only in euros.
The Green Card, for example, is an international insurance product, therefore it is issued only in the European currency, given that the obligations that arise for the insurance company outside the territory of Albania for the payment of compensation from this insurance are also in euros. On the other hand, the border policy is issued at border crossing points during the entry of vehicles with foreign license plates into the territory of our country and paying the policy premium in the local currency would complicate the process of providing the consumer with this insurance policy.
Likewise, some of the main products of the insurance activity, such as property insurance with commercial bank beneficiaries or debtor's Life insurance, are closely linked to the currency of the loan. The currency in which the loan is disbursed also dictates the currency of the policy issuance, due to the need to recover the value of the liability in the same currency, in the event of the occurrence of an insured event.
In addition to the mandatory Green Card and Border Insurance products, there are also several voluntary products that result in almost 100% income realized in euros, such as Combined Personal Accident and Health Insurance, Travel Life Insurance and Student Life Insurance.
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