Slovenia – still leading Central Europe?

Slovenia has been the richest and most economically developed of all the CEE countries for some time: a mercifully brief war to separate from Yugoslavia in the early ’90s allowed it to be a key beneficiary of the first rush of foreign capital that came into the region once the iron curtain was removed. Slovenia was the first CEE country to adopt the Euro as their currency. While Slovenia has always been cosmopolitan with strong Italian and Austrian influences, the boom in growth that catapulted their GDP per capita to Western European levels was fueled by corporate debt: debt that became unavailable in 2008, leading to a drop in GDP of 8.9% in 12 months: the worst in the region after the Baltics.

Government debt was 22% of GDP when the crisis started, and has risen to 53.7% (January 2013), and at the same time unemployment has risen from 6.3% to 13.6% (February 2013). The bad news is set to continue throughout 2013: Slovenia is expected to need a bailout during the year, and is the only one of the CEE EU member states not expected to experience growth: a fall in GDP of 2.3% is projected. The political situation is unstable with governments having a short lifespan, despite all parties trying to find solutions to avoid being the 6th Eurozone member to require a bailout. There is considerable local hostility to austerity measures.

High penetration, mature market

The Slovenian insurance market is the most evolved of all the CEE markets, with the highest spend per capita on insurance in the region (EUR 1,072 per year). Complex insurance products are available in the country as well as the more classic property and casualty lines.

Due to the small size of the Slovenian market, and it’s proximity to Zagreb, MAI Croatia has operational responsibility for  servicing clients with operations in Slovenia. MAI Hungary also services clients in Slovenia (especially eastern Slovenia). Both operations can provide a full suite of services to all clients.