Tax avoidance less of an incentive as rising personal incomes fuel growth in endowment, credit life and unit linked business

Improvements in Bulgaria’s supervisory regime and the country’s accession to the EU have led to a transforming influx of foreign insurance companies. For example, Vienna Insurance Group has taken overBulstrad,UNIQA has taken over Vitosha, Generali has taken over Orel and KBC has taken over the ex-state insurer DZI. ING and Cardif havesetup“freedomofestablishment” branches, while AIG has established a bancassurance joint venture with Etniki and United Bulgarian Bank. By the time this process had run its course in 2007, companies with majority foreign ownership were writing 97.0% of market premiums, up from 62.6% in 2005.

The Bulgarian insurance market consists of 20 non-life companies, 15 life companies, two life mutuals and 16 voluntary health funds. There are also six “freedom of establishment” branches, four of them non-life and two of them life. There are no quoted life insurers.