September 2021 Monthly Report

Overview of supervised entities’ activities in the financial services sector for September 2021

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of September 2021, mandatory pension funds (MPFs) had 2,096,543 members, i.e. 8,118 (0.39%) more than in the previous month. The largest share of a total of 9,307 new members (97.4%) were assigned by Regos automatically. Out of the 238 new members who actively selected the fund, category A was selected by 100 new members (42.0%), category B by 130 members (54.6%) and category C by 8 members (3.4%). Termination of membership due to retirement or death was recorded with respect to 1,190 insured persons, 20.1% more than in the previous month. Total net contributions paid to MPFs in September reached HRK 650.8 m, while the amount totalling HRK 5.5 bn has been paid to MPFs since the beginning of the year, 9.1% more than in the same period last year. Total payments from all the MPFs due to personal account closures in September reached HRK 135.0 m, while total payments from the beginning of the year totalled HRK 1.3 bn, an increase of 28.2% compared to the same period last year.

At the end of September 2021, net assets of MPFs increased by 0.3% on a monthly basis and stood at HRK 129.1 bn. Monthly Mirex returns reached -0.1% for categories A and B, and 0.02% for category C. Year-to-date Mirex returns reached 0.56% for category C, 5.20% for category B and 9.39% for category A, while annualised returns since the beginning of MPFs’ operation reached 7.5% for Mirex A, 5.5% for Mirex B and 4.7% for Mirex C[1].

At the end of September, bond investments of MPFs totalled HRK 83.0 bn (64.3% of total assets), making their share increase by 0.96 p.p. on a monthly basis. In the same period, the share of equity investments in the assets of MPFs slightly decreased, by 0.2 p.p, amounting to HRK 26.5 bn or 20.5% of MPFs’ assets. Investments in domestic shares accounted for 11.6%, while investments in foreign shares accounted for 8.9% of MPFs’ assets. Viewed by categories, category A MPFs have 37.2% of their assets invested in shares, category B MPFs have 21.8% of their assets invested in shares, while category C MPFs do not invest in shares due to their risk-averse investment strategy. As regards other investment types, investments in investment funds amounted to HRK 13.7 bn (10.6% of the assets), making the proportion of these investments in the assets fall slightly relative to the previous month (by 1.3 p.p.). Investments in cash and deposits amounted to 4.2% of the assets, or HRK 3.7 bn.

THIRD PILLAR PENSION FUNDS

In September 2021, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.4%, same as in the previous month, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) increased by 0.2%, making the number of members of these funds reach 346,752 and 45,520 respectively. Total monthly payment contributions made to voluntary pension funds (VPFs) in September amounted to HRK 55.0 m, increasing by 3.5% compared to the previous month. At the same time, total monthly payments from these funds amounted to HRK 24.6 m, a 19.3% increase compared to the previous month. Out of all the payments made from the funds, 7.3% were due to death, 26.0% due to the change of fund and the rest of 66.7% due to retirement and other reasons. With respect to payments made due to retirement, the amount of HRK 5.5 m was paid through a pension company (fund), HRK 6.3 m was paid in the form of lump-sum payments, while the amount of HRK 4.6 m was transferred for payment to pension insurance companies.

Net assets of VPFs grew by HRK 18 m in September (0.25% on a monthly basis), reaching HRK 7.35 bn, with monthly returns of individual funds ranging between -1.05% and 0.28%. Annual rates of return in September 2021 ranged from 0.37% to 14.40%, while year-to-date returns ranged from -0,04% to 9.63%. As regards the investment structure of VPFs, the largest part of the portfolio was still made up of bonds and amounted to a 56.5% share in total net assets, followed by shares with a 25.3% share and investment funds with a 11.0% share. The share of bonds in VPFs’ investments decreased on the monthly basis by 0.22 p.p., the equity share fell by 0.59 p.p., while the share of investments in investment funds increased by 0.24 p.p.

INSURANCE COMPANIES

In September 2021, there were 15 insurance companies operating on the market. Their total gross written premium in the first nine months of 2021 amounted to HRK 9.0 bn, of which HRK 2.2 bn (24.4%) related to life insurance premium and HRK 6.82 bn (75.7%) to non-life insurance premium. On an annual basis, total gross written premium rose by 12.2%, with the increase in non-life insurance premium totalling 12.9%, and the rise in life-insurance premium reaching 9.9%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (32.8%), followed by insurance of land motor vehicles (15.5%) and other property insurance lines (11.5%). The gross amount of claims settled reached HRK 5.2 bn, increasing by 9.0% on an annual basis. HRK 2.15 bn of this amount related to life insurance (a 2.3% increase on an annual level), while HRK 3.05 bn related to non-life insurance (a 14.4% increase on an annual level). In the total amount of claims settled in non-life insurance in the first nine months of 2021, the largest part related to motor vehicle liability insurance (33.8%), insurance of land motor vehicles (18.7%), insurance against fire and natural disasters (14.8%) and other property insurance lines (11.5%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 320.5 m in September 2021, increasing by 153.1% compared with the previous month. Regular trading in bonds reached HRK 16.1 m (monthly increase of 102.0%), while regular trading in shares reached HRK 236.6 m (monthly increase of 116.4%). Regular trading in ETFs amounted to HRK 2.5 m (monthly increase of 35.9%). The order book turnover recorded a monthly increase of 114.2%, while the OTC market turnover increased by 139.0%. Market capitalisation rose on the monthly level by 1.2%, and stood at HRK 271.97 bn at the end of September, with an equal part of shares and bonds. As for stock indices, the largest monthly rise was recorded by CROBEXnutris (21.3%) and CROBEXindustrija (19.8%), while CROBEXkonstrukt reported the largest monthly decrease (-37.4%). Podravka d.s. stock was most traded in September, with its turnover amounting to HRK 75.12 m (31.75% of the overall trade in stocks) and a monthly increase in price of 11.4%.

INVESTMENT FUNDS

In September 2021, there were 94 UCITS operating on the market, with their total net assets amounting to HRK 21.5 bn at the end of the month and growing by 1.7% compared to the previous month. This growth was due to positive market developments along with positive total net payments made to funds that reached HRK 493.6 m. Net payments were still positive in all the fund categories (equity funds HRK 33.7 m, balanced funds HRK 39.4 m, bond funds HRK 324.5 m, feeder funds HRK 21.5 m and other funds HRK 74.5 m). In September 2021, all categories of UCITS recorded negative asset-weighted average monthly return: bond funds -0.56 %, equity funds -1.59 %, funds categorized as other funds -1.28 %, balanced funds -1.59% and feeder funds -2.46%. Bond funds’ net assets accounted for 72.8% of the total net assets of all UCITS, while equity and balanced funds accounted for 10.4% and 6.2% of the total net assets of UCITS respectively.

The assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 1.02 bn at the end of September (a monthly decrease of 0.2%), with the monthly return of the fund reaching -0.04%.

 

The full report is available at Publications/Monthly reports.

 

[1] Beginning of operation: MPF category B: 30/4/2002; MPFs category A and C: 21/08/2014