August 2021 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of August 2021, mandatory pension funds (MPFs) had 10,026 members (0.48%) more than in the previous month, which made the total number of their members reach 2,088,425. The largest share of a total of 10,822 new members (98.2%) were assigned by Regos automatically. In the last year, the average monthly membership growth rate for category A MPFs amounted to 6.6%, for category C MPFs to 2.1%, while the rate for category B MPFs was still mildly negative (-0.1%). Termination of membership due to retirement or death was recorded with respect to 991 insured persons. Total net contributions paid to MPFs in that month reached HRK 628.6m, while the amount totalling HRK 4.9bn has been paid to MPFs since the beginning of the year, HRK 448.4m (10.2%) more than in the same period last year. Total payments from all the mandatory pension funds due to personal account closures in August reached HRK 150.7m. Total payments from MPFs since the beginning of the year totalled HRK 1.2bn, a HRK 284.7m or 31.1% rise compared with the same period last year.

At the end of August 2021, net assets of MPFs increased by 0.9% on a monthly basis and stood at HRK 128.7bn. Monthly Mirex returns stood at 0.97% for category A, at 0.55% for category B and at 0.20% for category C, continuing their unit value recovery trend in 2021. Year-to-date Mirex returns reached 9.50% for category C, 5.32% for category B and 0.54% for category A, while annualised returns since the beginning of MPFs’ operation reached 7.6% for Mirex A, 5.5% for Mirex B and 4.7% for Mirex C.

At the end of August, bond investments of MPFs totalled HRK 82.2bn (63.9% of total assets), making their share increase by 0.2 p.p. on a monthly basis. In the same period, the share of equity investments in the assets of MPFs rose by 2.7 p.p, amounting to HRK 26.5bn or 20.6% of MPFs’ assets. Investments in domestic shares accounted for 11.9%, while investments in foreign shares accounted for 9.1% of MPFs’ assets. Broken down by categories, the share MPFs’ assets invested in shares reached 37.2% and 21.8% for category A and category B respectively, 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 13.8bn (10.7% of the assets), making the proportion of these investments in the assets rise slightly relative to the previous month (by 2.0 p.p.). Investments in cash and deposits amounted to 4.2% of the assets, or HRK 5.4bn.

THIRD PILLAR PENSION FUNDS

In August 2021, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 0.4%, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) held steady, making the number of members of these funds reach 345,229 and 45,415 respectively at the end of the month. Total monthly payments made to voluntary pension funds (VPFs) in August amounted to HRK 53.1m, decreasing by 5.1% compared to the previous month. At the same time, total monthly payments from these funds amounted to HRK 20.6m, a 14.6% decrease compared to July. Out of all the payments, 67.4% were due to retirement, 25.2% due to the change of fund and the rest of 0.6% due to other reasons. The largest share of payments, that was made due to retirement and reached HRK 5.5m, was made through a pension company (fund), HRK 4.7m was paid in the form of lump-sum payments, while the amount of HRK 3.7m was transferred for payment to pension insurance companies.  

Net assets of VPFs grew by HRK 69m in August (0.95% on a monthly basis), reaching HRK 7.33bn, with monthly returns of individual funds ranging between 0.11% and 1.03%. The range of annual rates of return was significantly wider and reached from 0.85% to 14.46%, while year-to-date returns ranged from 0.11% to 9.57%. As regards the investment structure of VPFs, the largest part of the portfolio was still made up of bonds and amounted to a 56.7% share in total net assets, followed by shares with a 25.4% share and investment funds with a 10.8% share. The share of bonds in VPFs’ investments decreased on the monthly basis by 0.43 p.p., the share of investments in investment funds fell by 0.59 p.p., while equity share increased by 0.27 p.p.

INSURANCE COMPANIES

In August 2021, there were 15 insurance companies operating on the market. Their total gross written premium in the first eight months of 2021 amounted to HRK 8.1bn, of which HRK 1.98bn (24.4%) related to life insurance premium and HRK 6.15bn (75.6%) to non-life insurance premium. On an annual basis, total gross written premium rose by 12.1%, with the increase in non-life insurance premium totalling 12.7%, and the rise in life-insurance premium reaching 10.3%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (32.4%), followed by insurance of land motor vehicles (15.4%) and other property insurance lines (12.1%). The gross amount of claims settled reached HRK 4.6bn, increasing by 8.3% on an annual basis. HRK 1.9bn of this amount related to life insurance (a 0.3% decrease on an annual level), while HRK 2.7bn related to non-life insurance (a 15.4% increase on an annual level). In the total amount of claims settled in non-life insurance in the first eight months of 2021, the largest amounts related to motor vehicle liability insurance (34.1%), insurance of land motor vehicles (18.7%), insurance against fire and natural disasters (15.4%) and other property insurance lines (10.4%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 126.6m in August 2021, increasing slightly (0.7%) compared with the previous month. Regular trading in bonds, missing in the previous month, reached HRK 7.98m, while regular trading in shares and ETFs fell by 0.8% and 16.5% respectively. The order book turnover recorded a monthly decrease by 1.6%, while the OTC market turnover fell by 37.6%. Market capitalisation rose by 0.5% on a monthly basis, and stood at HRK 268.7bn at the end of August, of which shares accounted for 49.4% and bonds for 50.6%. As for stock indices, the largest monthly rise was recorded by CROBEXtransport (2.0%) and CROBEXturist (1.8%), while CROBEXkonstrukt reported the largest monthly decrease (-4.4%). The sharpest rise since the beginning of the year was recorded by the food index CROBEXnutris (16.44%) and industrial index CROBEXindustrija (11.67%). Atlantska plovidba d.d. stock was the one most traded in August, with its turnover amounting to HRK 13.99m (12.8% of the overall trade in stocks) and a monthly increase in price of 11.9%.

INVESTMENT FUNDS

In August 2021, there were 94 UCITS operating on the market and managing net assets totalling HRK 21.1bn, a 2.0% rise compared with the previous month. This growth was due to positive market developments along with positive total net payments made to funds that reached HRK 355.2m. Net payments were still positive in all the fund categories (equity funds HRK 43.5m, balanced funds HRK 29.4m, bond funds HRK 181.8m, feeder funds HRK 24.6m and other funds HRK 75.8m). In August 2021, the largest asset-weighted average monthly return (1.98%) was generated by feeder funds, followed by equity funds (1.79%) and balanced funds (0.92%). Funds belonging to the category “other” recorded a monthly return reaching 0.51%, while bond funds generated a monthly return totalling 0.15%. Bond funds’ net assets accounted for 72.8% of the total net assets of all UCITS at the end of August 2021, while equity and balanced funds accounted for 10.6% 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 1.02bn at the end of August, a monthly decrease of 0.5%, with the monthly return of the fund reaching -0.3%.

The full report is available at Publications/Monthly reports