Interview with Klaidi Çitozi, CEO of Sigma Vienna Insurance Group

Although the Albanian economy has grown and strong international groups are present, the insurance market continues to remain one of the least developed in Europe. With less than 1% of GDP, this market relies mainly on mandatory insurance, while voluntary insurance remains in the shadows. In an interview for Monitor, Klaidi Çitozi, CEO of Sigma Vienna Insurance Group, explains that the combination of low-income levels, limited insurance culture, and the lack of incentives for new products has kept the sector underdeveloped.

He emphasizes that only through financial education, innovation, and stronger cooperation between institutions and private companies can the market move closer to regional and European standards. According to him, the growth of voluntary insurance requires investment in citizen education, improvement of customer experience, and the development of new products that address the real needs of individuals and businesses.

Mr. Çitozi, how would you evaluate Sigma’s performance during 2024 and the first half of 2025?

2024 was a positive year for Sigma VIG, in a market that nonetheless remained full of challenges.

We achieved premium growth above the market average, consolidating our traditional positions not only in motor insurance but also in property insurance — a segment we consider strategic for long-term development. In 2025, the trend remained positive: gross written premiums have increased by around 10%, while the market overall grew at a slower pace. This indicates that our strategy is sustainable and differentiating us from the competition. Another key element is human capital. Sigma is continuously recruiting to attract qualified staff and strengthen our teams at all levels. We train employees not only for the technical skills required in the insurance industry but also for developing soft skills such as communication, customer relationship management, and teamwork, which are equally important for delivering excellent service. This combination of technical expertise and interpersonal abilities has allowed us to maintain high performance and strengthen customer trust.

What are your expectations for the coming period?

We expect 2025 to close with strong results, with a clear focus on the growth of voluntary insurance. The potential for this is considerable.

Sigma will continue focusing on improving health insurance products, SME business insurance, and developing innovative products for individuals. Being part of Vienna Insurance Group gives us the opportunity not only to offer European-standard products but also to access some of the best private hospital networks in Europe.

We will apply the same approach in the Kosovo market, where we are also present through our branch. There too, we see potential to become a key player and to expand the range of services we provide.

Why does the Albanian insurance market remain one of the lowest in Europe, with less than 1% of GDP?

In Albania, the ratio of non-life insurance premiums to GDP is around 0.9%, while the European average for total insurance premiums exceeds 6%. This large gap is due to several factors. First, income per capita remains low compared to EU countries. Second, the insurance culture is limited. Citizens often perceive insurance as an expense rather than a tool for long-term stability. Another factor relates to the market structure, which has historically relied mainly on mandatory insurance.

Moreover, the underdevelopment of the broader financial sector has limited access to and use of modern financial instruments, including insurance.Various studies show that limited supply and incomplete access to financial services create serious barriers to the expansion of the insurance market. This combination of factors explains why Albania remains at much lower levels compared to the region and Europe, despite the presence of international companies.

With rising living standards over the last 7–8 years, citizens are increasingly seeking security and stability. This progress must be accompanied by using appropriate financial instruments — not only to protect what has been achieved but also to ensure the continuity of that standard in the future.

The same principle applies to businesses — whether large corporations or small and medium enterprises — which must protect their capital, people, and long-term projects. Nevertheless, the development of the tourism sector has indirectly increased the demand for insurance: the growing number of vehicles has raised the need for motor insurance; accommodation structures require property and liability coverage; and the expansion of lending has increased the demand for collateral-related insurance.

Another positive factor is the growing presence of foreign companies in the Albanian market, which bring with them a more developed insurance culture. They seek coverage for their assets and employees, introducing this mindset into the workplace and gradually raising awareness among individuals about the importance of personal insurance. The government has also played a significant role through economic and legal reforms that have created a more favorable environment for the development of the insurance market.

Why has the entry of foreign companies not given a stronger impulse to market diversification?

The entry of international groups has been an important development, as it has brought higher service standards, a broader product range, and greater transparency. However, this has not been enough to deliver the expected transformation of the market. There are several reasons. The Albanian market remains small in volume, and innovative products require a large customer base and higher premium levels to be financially sustainable.

Moreover, the environment has not always been favorable for developing new products. Incentives for voluntary insurance are often lacking, while mandatory insurance continues to dominate the market portfolio. Another factor is public mentality — citizens often expect that in case of natural disasters or major emergencies, the government will provide the solution. This perception stems from tradition, but in reality, no state budget can bear the full cost of large-scale catastrophes. Therefore, individuals and businesses must understand that the long-term solution is not waiting for public aid but building their financial independence through insurance.

Only in this way can real and sustainable protection be ensured — one that does not depend on temporary decisions or resources.For Sigma VIG, however, this has been an opportunity. As part of Vienna Insurance Group — one of the largest groups in Central and Eastern Europe — we have been able to bring in international best practices, strengthen our capital base, and build a long-term business model. VIG views Albania as a market with great future potential. Despite current challenges, economic growth and increasing financial awareness create the foundation for sustainable development. For this reason, the Group’s support has given us a clear advantage in becoming an important factor in transforming the domestic market.

The market still depends heavily on mandatory insurance. What should be done to increase the share of voluntary insurance?

It’s true that about 70% of the Albanian market is still dominated by mandatory insurance, primarily motor insurance. To increase the weight of voluntary insurance, several interconnected actions are needed:

Financial education of clients.

Insurance is often perceived simply as an imposed cost, while in essence it is an essential instrument for financial stability. Citizens must see insurance not as a cost but as an investment in the future — a way to protect their standard of living and ensure its continuity even in difficult times. Similarly, businesses — whether corporations or SMEs — must understand that insurance protects their capital, assets, and human resources.

Customer service.

Customer experience is crucial. A client who receives compensation on time and transparently gains trust in the company and sees insurance as a partner in their activity. Therefore, companies must invest in fast and simple claims management processes. Sigma has made concrete progress in this regard, reducing average claim settlement times and strengthening open communication with clients.

Development of new products.

Voluntary insurance can grow only if it responds to real market needs — meaning more product types and combined packages for families, as well as coverage for emerging risks related to climate change or digital activity.

Institutional support and an enabling legal framework.

Alongside company efforts, the government also plays a key role through incentive policies and legal initiatives that aim to make insurance more accessible and attractive for citizens and businesses.

In this process, the Financial Supervision Authority (AMF) has been a key factor.

Through continuous reforms and the strengthening of the regulatory framework, AMF has contributed to greater transparency and efficiency in the market. Today, damage calculation is publicly accessible on AMF’s website; every individual can calculate their own insurance premium, and claim processing times have been significantly reduced thanks to the new standards set.

Another sign of this progress is the organization — for the first time in Albania — of the 2025 Global Annual Conference of the International Association of Insurance Supervisors (IAIS), positioning AMF as an active actor not only nationally but also regionally, fostering the exchange of best practices and alignment with European standards. If these efforts move forward in parallel, the share of voluntary insurance in Albania could gradually approach the levels seen in the region and the EU.

How are climate changes affecting the insurance market?

Climate change has significantly increased natural risks. Floods, storms, and earthquakes have become more frequent, leading to two outcomes: higher demand for insurance but also greater pressure on companies. For Sigma VIG, this is an additional reason to be proactive. We are developing products that better address these risks and advocating for greater public awareness. Albania needs a national climate risk management strategy, with insurance as a central component.

The draft law on mandatory earthquake insurance was recently published. How do you assess this initiative?

The draft law on mandatory earthquake insurance is an important step for the country’s financial stability and citizen protection. Albania is one of the countries with the highest seismic risk in the region, and the events of 2019 clearly showed that financial losses can be colossal and unsustainable by the state budget alone. However, for such a scheme to be functional and sustainable, active participation of insurance companies is essential. This is due to their existing infrastructure — licensed agent networks, IT systems, and specialized human resources for product and claims administration. International experience clearly shows that public–private cooperation is the key to success.

Models such as France’s CATNAT system, or practices in Germany, Italy, and Croatia, show that the state provides guarantees and instruments for major disasters, while private companies remain the main mechanism for risk distribution, citizen service, and claims management.

An integrated model — where the state provides guarantees and subsidies for vulnerable groups, while private companies handle sales, claims assessment and payment, and reinsurance — would be more sustainable and transparent. If this synergy between the state and the private sector is achieved, the scheme will gain citizen trust, be affordable for consumers, financially sustainable, and ensure that after every disaster, individuals and businesses have a real mechanism to recover and continue their lives and activities normally.