The challenge for Prva Group is not only to increase its market share but also to educate the market in a way that would result in better inclusion. From this perspective, the group’s activities on the market don’t relate only to grow the business, but rather it is equally important that they support the goals of the Government of Serbia.
You took over the chairmanship of the management board just a few days ago and did so following a very successful year for Prva Group. Do you operate equally well on all markets?
– Last year was very demanding for financial markets, yet we managed to achieve yields that were among the best in every operating country. This helped us grow again, and now Prva Group has over a billion euros of assets under management – another sign of trust and importance for customers and the region in which we operate.
Being present in a region that has intense economic cooperation is also one of our advantages, as many companies are active in all these markets and seeking a partner that can support them. Markets vary, and we are the ones who can advise clients on how to best implement pension savings for employees.
You are striving to become the largest provider of voluntary and compulsory supplementary pension insurance in the region, with a market share of at least 25% in the countries in which you operate. How far away from achieving that goal are you?
– Our market share across the region ranges by market from 17% to over 50%, which indicates that every market is a challenge in itself. What could be defined as a common point is that the absolute growth potential is much more important than the struggle for relative shares on all markets. With high economic growth in Slovenia over the last few years, we believe that the increase in paid premiums mainly came as a result of the additional hiring of employees and had barely anything to do with new companies providing benefits to their employees. The same applies to all markets. In Serbia, for instance, we are below our target market share, but we see the greatest issue as being in the relatively small number of businesses and the respective active population included in systems.
Pension companies like Prva Group are here to help and support with all their knowhow and experience
We notice that pension products are well recognised and well used in international companies, and partially also in public companies. Compared to Slovenia, the number of companies included is a few times lower, which represents great growth potential in absolute terms for all market players.
Therefore, a trusted and experienced pension company such as our DDOR Garant in Serbia could be a great partner.
Pension system reform was completed in Slovenia almost 20 years ago, while in Serbia it practically hasn’t even started. What should our country do if it wants a sustainable system?
– We had two pension system reforms in Slovenia in less than 20 years, and now we are again facing another. Our latest change was the introduction of life cycle funds, which are suitable for attracting new participants into the system.
Based on our experience, one recommendation for the development of the pension system in Serbia is the introduction of life cycle funds. Another thing that’s important for supporting a sustainable system is the general acceptance of measures. People should grasp the rationale behind private pensions and the state should promote them.
Linking some tax reductions to pensions is a very good incentive, but that shouldn’t be the only one. Promoting from the top would mean that all public enterprises should be included in voluntary pensions. This would set the standard on the labour market and push all others to follow suit.