Insurers invest in government securities and shun investment in bank deposits

Insurance companies in our country have reduced their investment in deposits by nearly 12% in the first quarter year-on-year, according to data of BNB (Bulgarian National Bank). In late March, deposits of companies in the sector amounted to BGN 892 mln. Besides deposits, our domestic insurers have reduced the funds they have invested in shares and other forms of property. This type of investments were 19% less than in 2011 and amounted to a total of BGN 427 mln. The volume of receivables also decreased, albeit at a slower pace, reaching BGN 530.5 mln or BGN 12.7 mln less . It is interesting that, despite the financial uncertainty and economic crisis in this period, branch companies have increased their investments in government securities by nearly 24% up to BGN 2.33 bn. Meanwhile, the statistics showed that insurers have reduced their investments in the real estate sector by nearly BGN 5 mln to BGN 147.2 mln.

As a whole, the funds managed by 65 insurance, reinsurance and health-insurance companies operating in our country reached BGN 4.9 bn at the end of March. On an annual basis, their amount increased by BGN 221.9 mln or by BGN 103.5 mln, compared to the fourth quarter of 2011. There is similar growth of investment in Bulgaria, which increased by BGN 116.9 mln (4.5%) on an annual basis up to BGN 2.72 bn. Funds invested in the European Union increased at a faster pace from BGN 139.4 mln (7.5%) up to BGN 2 bn. However, a considerable decrease was also reported in terms of the funds invested in the U.S. (by 24 %, down to BGN 93 mln), while in other countries there was a 5% drop to BGN 99 mln. The companies continue to hold their assets in Bulgarian currency and, at the end of March, those kept in BGN reached 49.4% of the funds, or BGN 2.42 bn, while the funds kept in Euro stood at 19.1%, compared to 22.9% in March 2011. USD deposits increased by 3.58% to BGN 231 mln, while in other currencies these rose by 23% on an annual basis, up to BGN 1.31 bn.
Meanwhile, it became clear that, last month, two insurance companies in the EU expressed their wish before the Bulgarian Financial Supervision Commission to operate in our country.

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