December 2021 Monthly Report

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

PENSION FUNDS

SECOND PILLAR PENSION FUNDS

At the end of December 2021, mandatory pension funds (MPFs) had 2,111,192 members, i.e. 5,431 members (0.26%) more than in the previous month. A total of 67,687 new members joined MPFs in the entire 2021, 14.2% more than in 2020, when 59,267 new members entered the second pillar system. At the end of 2021, category B funds recorded 89.98% of all MPF members, while category A and category C funds had 7.12% and 2.90% of all MPF members respectively. Out of the 67,687 new members recorded in 2021, 65,175 (96.29%) were assigned by Regos automatically, while this share reached 95.92% in the previous year. Termination of membership due to retirement or death was recorded with respect to 3,887 insured persons, 14.21% more than in 2020, when termination of membership was recorded with respect to 59,267 insured persons. Total net contributions paid to MPFs in 2021 amounted to HRK 7.5bn or 9.2% more compared to the previous year. At the same time, total payments from all MPFs due to personal account closures reached HRK 1.9bn in 2021, a 23.3% increase relative to 2020.

At the end of December 2021, net assets of MPFs amounted to almost HRK 133bn, rising by HRK 13.9bn (11.7%) in comparison with end-2020. Annual Mirex returns reached 13.5 % for category A (0.43% in 2020), 7.4% for category B (0.94% in 2020) and 0.4% for category C (1.15% in 2020). At the end of 2021, annualised Mirex index returns since the beginning of MPFs’ operation reached 7.8% for Mirex A, 5.5% for Mirex B and 4.5% for Mirex C[1].

Bond investments of MPFs totalled HRK 83.4bn at end-December (62.7% of total assets), making their share decrease by 5.47 p.p. on an annual basis. In the same period, the share of equity investments in MPFs’ assets rose by 2.68 p.p. on an annual basis, amounting to HRK 28.2bn or 21.2% of MPFs’ assets at the end of December. Investments in domestic shares accounted for 11.98%, while investments in foreign shares accounted for 9.19% of MPFs’ assets. As regards other investment types, investments in investment funds amounted to HRK 15.5bn (11.7% of the assets), making the proportion of these investments in total assets increase by 3.41 p.p. relative to end-2020. At the end of December 2021, investments in cash and deposits amounted to 3.2% of the assets, reaching HRK 4.3 bn.

THIRD PILLAR PENSION FUNDS

In 2021, the number of members of 8 open-ended voluntary pension funds (OVPFs) rose by 4.75% on an annual basis, while the number of members of 20 closed-ended voluntary pension funds (CVPFs) increased by 1.71%, making the number of members of these funds reach 351,251 and 46,002 respectively at end-2021. Total monthly payments made to voluntary pension funds (VPFs) in 2021 amounted to HRK 933.95m, increasing by 9.75% compared to the previous year.

Total annual payments made from these funds in 2021 reached HRK 306.78m, rising by HRK 19.7m (6.88%) compared to total payments made from VPFs in 2020, when they amounted to HRK 287.04m. Total payments from VPFs made due to retirement and other reasons accounted for 67.98%, payments made due to the change of fund reached 24.61%, while those made due to death accounted for 7.41% of total annual payments made from VPFs in 2021. As regards total annual payments made due to retirement, the amount of HRK 84.71m was paid in the form of lump-sum payments, HRK 64.98m was paid through a pension company (fund), while the amount of HRK 57.57m was transferred for payment to pension insurance companies.

Net assets of VPFs grew in December by HRK 348.3m (4.67% on a monthly basis), reaching HRK 7.8bn, and increasing more than twice relative to end-2020 (a 115.78% growth on an annual level). VPFs’ annual rates of return ranged from -0.30% to 13.45%. As regards the investment structure of VPFs, the largest part of the portfolio was made up of bonds and amounted to a 52.4% share in total net assets, followed by stocks with a 25.1% share and investment funds with a 12.6% share. The share of bonds in VPFs’ investments decreased on an annual basis by 6.57 p.p., while the share of investments in stocks and investments funds rose by 1.09 p.p. and 2.62 p.p. respectively.

INSURANCE COMPANIES

In December 2021, there were 15 insurance companies operating on the market. Their total gross written premium in the entire 2021 amounted to HRK 11.7bn, of which HRK 2.9bn (24.7%) related to life insurance premium and HRK 8.8bn (75.3%) to non-life insurance premium. On an annual basis, total gross written premium rose by 11.9%, with the increase in non-life insurance premium totalling 12.7%, and the rise in life-insurance premium reaching 9.4%. The structure of non-life insurance gross written premium was dominated by motor vehicle liability insurance (33.5%), followed by insurance of land motor vehicles (15.9%) and other property insurance lines (10.5%). The amount of claims settled reached HRK 7.3bn, increasing by 11.8% on an annual basis. HRK 3.0bn of this amount related to life insurance (a 7.7% increase on an annual basis), while HRK 4.3bn related to non-life insurance (a 14.8% rise on an annual basis). In the total amount of claims settled in non-life insurance in 2021, the largest amounts relate to motor vehicle liability insurance (34.0%), insurance of land motor vehicles (18.4%), insurance against fire and natural disasters (13.1%) and other property insurance lines (12.5%).

CAPITAL MARKET

The total turnover on the Zagreb Stock Exchange reached HRK 2.54bn in the entire 2021, declining by 18.8% compared with 2020. At the same time, market capitalisation fell slightly (by 1.13%) relative to 2020. As regards stock indices, the largest annual growth (24.13%) was recorded by CROBEXnutris, while CROBEXkonstrukt recorded the sharpest decline (31.49%). Podravka d.d. was the stock most traded in 2021, with its turnover amounting to HRK 215.68m (12.4% of the overall trade in stocks in 2021) and a 30.31% price increase relative to end-2020.

INVESTMENT FUNDS

In December 2021, there were 93 UCITS operating on the market, as in the previous month, with their total net assets amounting to HRK 21.5bn at the end of the month and growing by HRK 3.3bn or 18.1% compared to end-2020. The trend of positive total monthly net payments was interrupted in December due to large negative net payments of bond UCITS, as a result of which total net payments of all UCITS were also negative (HRK -210.8m). 2021 saw positive total net payments of UCITS (HRK 3.0bn), as opposed to 2020, when total annual value of repurchased units exceeded that of issued units by HRK 4.9bn. Bond funds’ net assets accounted for 70.0% of the total net assets of all UCITS at the end of December, while equity and balanced funds accounted for 11.3% and 6.8% of the total net assets of UCITS respectively.

Net assets of the Fund for Croatian Homeland War Veterans and Members of their Families amounted to HRK 989.7m (a 1.2% monthly increase), with the monthly return of the fund reaching 1.35%. On an annual basis, net assets of that fund rose by 2.54%, while its annual return reached 3.55%.

The full report is available here.

[1] Beginning of operation: MPFs category B: 30/4/2002; MPFs category A and C: 21/8/2014