Системен риск и застрахователна устойчивост в България
Systemic Risk and Insurance Resilience in Bulgaria

Author(s): Plamen Danailov
Subject(s): Politics / Political Sciences, Politics, Economy, National Economy, Business Economy / Management, Economic policy, Environmental and Energy policy, EU-Approach / EU-Accession / EU-Development, Green Transformation
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: systemic risk; insurance; protection gap; NatCat; climate risk; motor third party liability insurance; FSC3; EIOPA4
Summary/Abstract: The report analyzes the systemic risk in Bulgarian insurance through three dimensions: insurers’ solvency, risk concentration in motor insurance and insufficient insurance protection for natural and catastrophic events (protection gap). The main thesis is that the sector is capital-stable and does not show signs of systemic insolvency, but this does not mean the absence of systemic risk. The more significant vulnerability is structural, respectively, a significant share of the risk remains outside the insurance system and in the event of a disaster can be transferred to households, businesses, municipalities and the state budget. The market remains highly dependent on motor insurance, especially on the mandatory “Civil Liability” insurance of motorists. This creates a concentration risk in companies with a business model dominated by this product. In parallel, the insufficient development of property insurance and the limited coverage of natural risks form a “protection gap” in insurance protection. Reducing this deficit should be considered as part of the policy for financial stability, fiscal sustainability and climate adaptation.

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