site.btaInsurance Remains Affordable as Demand for Voluntary Coverage Grows, Association of Bulgarian Insurers Head Says

Insurance remains highly affordable, with little significant change in prices for many types of cover, Chair of the Management Board of the Association of Bulgarian Insurers Nikolay Stanchev told the Bulgarian News Agency (BTA). He talked about developments in the insurance sector in 2026, as well as current issues facing the industry.

Stanchev noted that quality home insurance for an average apartment typically costs between EUR 60 and EUR 100 a year, roughly the price of a family dinner out. There has been no unusual increase in the price of compulsory third-party liability insurance for motorists, he added.

"If we look at a longer period, we can see that the average market price today is comparable to that in 2021. Over the past five years, it has increased by around 6.5%, while inflation has been about 42% and the cost of repairs and labour has risen by more than 105%. In recent months, there has indeed been some movement in prices for certain categories of vehicles. To a large extent, this is a natural market response following the withdrawal of an insurer that for years had been offering policies below cost," Stanchev said.

He noted that when discussing the price of compulsory third-party liability insurance, it is important not to forget what its primary purpose is - to protect people injured in road accidents. The policy must therefore remain affordable, while also providing sufficient financial resources to pay compensation, he said.

On the subject of "seasonal" insurance, Stanchev said there may be an expectation that the price should be directly proportional to the length of the insurance period, for example, that a six-month policy should cost half as much as an annual one. In insurance, however, premiums are determined not only by the duration of coverage but also by the level of risk.

"With motorcycles, for example, the months when they are used most actively are precisely those when the risk of road accidents is highest. It is therefore unrealistic for the price of a seasonal policy to be determined solely in proportion to the number of months of coverage," he said.

This is why, Stanchev explained, the issue of seasonal insurance is somewhat more complicated than it may initially appear. On the one hand, there are vehicles such as motorcycles that are typically used only during part of the year, and it is perfectly understandable that their owners would seek more flexible solutions. But current legislation requires every registered motor vehicle to have valid compulsory third-party liability insurance throughout the entire period of its registration.

Therefore, if seasonal insurance is introduced, there will need to be a clear mechanism governing what happens once the seasonal policy expires, whether the vehicle’s registration will be temporarily suspended and it will no longer be allowed on the road, or whether a new insurance policy will have to be taken out, Stanchev explained.

These practical issues are currently being discussed by a working group involving representatives of motorcyclists, government institutions and the Association of Bulgarian Insurers. The aim is to find a workable solution that meets consumers’ expectations while ensuring that no registered vehicles are left without the mandatory insurance coverage.

According to Stanchev, the introduction of the bonus-malus system, which links the cost of compulsory third-party liability insurance to a driver’s behaviour on the road, is now in its final stages.

Following the adoption of two regulations governing the system, the Guarantee Fund and insurers will adapt their information systems. If everything proceeds as planned, it is entirely realistic for the system to become operational at the beginning of 2027, Stanchev said.

He noted that insurers already use the bonus-malus principle when assessing risk. The difference is that, until now, each company had access only to information about its own customers. The new system will allow this information to be shared among all insurers. Thus, if a driver has caused claims or damage in the past, this will be taken into account even if they decide to switch insurers, he explained.

Ultimately, Stanchev said, this will make the system fairer. Drivers with a good insurance record will be able to receive better terms, while those who cause claims more frequently will pay higher premiums. This is the fundamental idea behind the system: for the price of insurance to more accurately reflect the actual level of risk.

In recent years, insurers have observed an increasingly clear trend of growing interest in voluntary insurance coverage. Although motor insurance continues to account for around 70% of the general insurance market, faster growth in property, health and other types of voluntary insurance is gradually leading to a more balanced market structure.

This trend is also confirmed by the findings of a national survey conducted in May: the share of people who have or have had one of the main types of voluntary insurance has nearly doubled over the past six years.

"Even more telling is the fact that the share of people who take out insurance solely because they are legally or contractually required to do so has fallen from 59% in 2020 to 32% in 2026. This means that more and more people are choosing voluntary insurance because they see a real benefit for themselves and their families, rather than simply because they are required to," Stanchev said.

Despite this positive trend, the level of voluntary insurance in Bulgaria remains lower than in most European countries. According to the industry, this points to significant potential for further market development. If the shift in attitudes continues, and people receive more information and gain a better understanding of the opportunities offered by insurance, an increasing number of them will see it as a natural tool for protecting their property, health and financial security, the association’s chair said.

He stressed that people should not wait until a risk becomes personal before taking action, the best approach is to take out insurance before an adverse event occurs.

Data from the Financial Supervision Commission show that in 2025, property insurance was among the fastest-growing segments of the market, expanding by more than 24%. Meanwhile, the national representative survey on attitudes toward insurance found that the share of people who have or have had property insurance increased from 16% in 2020 to 31% in 2026.

According to Stanchev, the main driver behind this change is the increasing frequency of natural disasters. More and more people realize that such events can cause serious financial losses, while insurance is the most effective way of dealing with their consequences.

"I believe the active information campaigns conducted by the Association of Bulgarian Insurers in recent years have also contributed. We see that when people receive more practical information about risks and how property insurance works, they are much more likely to decide to protect their homes," he added.

A positive trend is also being observed in agricultural insurance, partly due to improved conditions for co-financing premiums, of up to 70%, through the State Fund Agriculture, as well as a simplified administrative process. Nevertheless, some of the funds available under the scheme remain unused.

Stanchev urged farmers to take advantage of this opportunity, because having insurance can be the decisive factor in whether a farm survives a severe natural disaster.

Health insurance is another area experiencing dynamic growth, the association’s chair noted. Premium income increased by around 23% in 2025, although this was driven primarily by the higher costs for medical services.

"In Bulgaria, these insurance policies are mainly taken out by employers for the benefit of their employees and have become one of the most highly valued employee benefits. According to our data, around 600,000 people benefit from this type of insurance. Insurers could play an even more active role in this market if our place within the healthcare system were more clearly regulated. This would ensure better oversight of the quality of medical services and more efficient management of funds," Stanchev said.