The Governor of the Central Bank of Bosnia and Herzegovina (CBBiH), Jasmina Selimovic, stated yesterday in Sarajevo at the conference “Insurance Days in BiH” that in a time of growing uncertainty, the insurance sector in BiH can become a key partner to citizens and the economy.
She stated that the share of insurance in total financial assets amounts to only five percent, which is significantly below the average of the countries of the region and the European Union (EU).
“Among the key problems are the weak representation of voluntary insurance, the lack of institutional investors, a shallow capital market, and the low purchasing power of the population. Households in BiH spend about 38 percent of their budget on food and drink, while the EU average is about 15 percent, which directly limits the space for investment in insurance,” said Selimovic.
She specified that the insurance market is characterized by a pronounced dominance of auto-insurance, which makes up more than 70 percent of total premiums, while life and health insurance remain on the margins, and the stagnation of life policies is further emphasized by the drop in their share in total premiums.
Selimovic added that the perception of insurance among citizens is mostly reduced to a legal obligation, while its role as protection or a form of long-term savings is rarely recognized.
She emphasized that the market is highly concentrated because the five largest insurance companies hold about 88 percent of the total market, which indicates low diversification and resilience of the sector.
“Inflation in BiH, which in the first seven months of 2025 amounted to 3.8 percent, directly affects the growth of operating costs of insurance companies. The CBBiH predicts that inflation for the whole year will amount to about 3.5 percent. These developments inevitably lead to the need to increase premiums, which puts the sector before the challenge of preserving competitiveness and the trust of users,” said Selimovic.
She explained that health insurance records the most dynamic growth, driven by greater interest of citizens in additional protection after the pandemic and by the rise in the prices of health services, and that property insurance also suffers from inflationary pressures because the rise in the value of property automatically entails an increase in insured sums and premiums.
“In a country with a currency board where monetary levers are limited, the stability of the regulatory framework becomes crucial. Despite the challenges, the insurance sector has the potential to become a pillar of the resilience of the financial system and a motor of development through long-term investments and risk protection,” concluded Selimovic, as stated by the CBBiH.
