Croatia – interesting times ahead

Croatia is the member state of the European Union as of July 1st, 2013. The Croatian economy briefly showed signs of recovery last year after a couple of very tough years (2008 – 2009) which saw a collapse in the financial markets, increasing unemployment and a marked decline in income. The hoped for recovery however has not emerged, and the country now faces the extra burden of EU regulation to further stifle chances of economic recovery. Unemployment is high at above 12%, with more than 40% youth unemployment. Not surprisingly given its location, Croatia’s largest trading partners are within the Eurozone.

The last few years have seen radical changes in the country’s legislature, and moves towards building a more stable and regulated economy to attract inward investment: corruption has been highlighted as a serious problem in Croatia, and strenuous efforts have been made to reduce corruption and increase transparency.

Low penetration, high opportunity

There is a great potential for insurance products in the Croatian market, as historically they have not enjoyed a high penetration, and often values are at book rather than replacement cost.

MAI Croatia is working actively with a number of key insurers to develop products that will prove attractive to Croatians, and cover:

Reinsurance for local insurers writing large and complex risks
Financial loss and bonds for CAR/EAR
PI schemes
Public entities, particularly for casualty
EU opportunities

The planned accession to the EU by Croatia in the summer of 2013 will undoubtedly open up major opportunities in areas such as trade, privatisation, construction, infrastructure and energy, but there are significant cultural and logistical challenges in the path of investors.

MAI Croatia is already well-versed in helping companies understand these risks and opportunities and provides expert counsel for companies looking to protect their investments