The demand for insurances in Bulgaria is growing because of the increased disaster risk in recent years.
Market surveys show that a week before the floods in the Danube River region a record number of people tried to insure their property. The boom was resulted from the first indications of increased water levels, Capital newspaper reported.
People's fear from such natural disasters seemed like the perfect opportunity for insurers to increase their profits through adequate marketing and advertising, Capital said. Allianz Bulgaria began offering insurance policies at promotional prices from May to June.
Allianz's example was not followed by other insurance companies. Market survey shows the insurers did not change their marketing strategy, advertising mainly car insurance policies. Car insurance produces over 60 per cent of the sector's revenue.
Companies said that the reason for this apparent passive behaviour is the poor insurance culture of Bulgarians who still do not think insuring their property is necessary. Other reasons for the low demand for real estate insurance are the high prices.
Because of the low demand, insurers are discussing the creation of a disaster management pool. The pool will use state and insurers' investment to cover damages caused by earthquakes and floods. All real estate owners will be obliged to insure their property. The government has already agreed to support the project, but insurers still disagree whether the pool is necessary.
Before a decision on the pool's creation is taken, insurers refrain from investing in advertising property insurance policies. This might be another reason for the low revenue from such policies, Capital said.
Market surveys show that a week before the floods in the Danube River region a record number of people tried to insure their property. The boom was resulted from the first indications of increased water levels, Capital newspaper reported.
People's fear from such natural disasters seemed like the perfect opportunity for insurers to increase their profits through adequate marketing and advertising, Capital said. Allianz Bulgaria began offering insurance policies at promotional prices from May to June.
Allianz's example was not followed by other insurance companies. Market survey shows the insurers did not change their marketing strategy, advertising mainly car insurance policies. Car insurance produces over 60 per cent of the sector's revenue.
Companies said that the reason for this apparent passive behaviour is the poor insurance culture of Bulgarians who still do not think insuring their property is necessary. Other reasons for the low demand for real estate insurance are the high prices.
Because of the low demand, insurers are discussing the creation of a disaster management pool. The pool will use state and insurers' investment to cover damages caused by earthquakes and floods. All real estate owners will be obliged to insure their property. The government has already agreed to support the project, but insurers still disagree whether the pool is necessary.
Before a decision on the pool's creation is taken, insurers refrain from investing in advertising property insurance policies. This might be another reason for the low revenue from such policies, Capital said.
