Abstract. The article is introducing a new point of view of using Insurance products as an alternative financial mechanism. Insurance represents a new way out of recovering impacts of post Covid19 by assuring a more predictable future through risk mitigators of unexpected events businesses and/or individuals will face ahead. I will show an analysis of current situation of tourism chain of stakeholders; client targets served, level of finance access, approaches they use on running their role to attract clients and their projections for growth. There have been several measures to support tourism business by government or international entities while still look there is a challenge on being eligible and trustworthy to access finance, which implies “frozen” investments on this area. On the other hand, the ambiguity of the future and the “trauma” effect of COVID19, made these businesses be more skeptical and fearing more the future. Insurance products as: public & professional liability, agribusiness insurance for the food chain served to clients are financial mechanisms to boost increase of operators ‘credibility from Tour Travel Agencies to HORECA entities, which implies a more reliable, strong competition in the region among other countries to make Albania a destination of choice for EU, Eastern EU citizens and more. Insurance covers financial unexpected expenses, which improves the business owners’ behaviors toward the future, desire and courage to extend investments. It provides a strong “collateral” to access finance leading at more extended “business growth breath” contributing to a larger extend on leveraging this industry and welfare of the country.

Keywords: Insurance products, access to finance, business growth, credibility, reliable competition



Tourism is one of the main core development pillars for Albania. As stated at the National strategy for sustainable Tourism Development 2019 – 2023”

“Tourism gives a direct contribution of 8.5% to GDP and an indirect added value of 26.2%. Tourism is also the sector with the highest employment potential, where 93,000 individuals were directly employed
while in overall there were 291,000 employed in the sector during 2017. Meanwhile, the sector’s contribution to the economy is projected to grow significantly over the next 10 years, with the tourism sector expected to account for only 8.8% of the GDP in the next 2-3 years, while by 2028, the sector may reach 9.3% of the GDP. Thus, taking into account this upward trend, it is projected that by 2028 the direct and indirect effect of the tourism sector will reach approximately 1/3 of Albania’s total GDP.”

Considering this vision there are many initiatives to boost tourism in Albania including internal actions as infrastructure improvements (roads, accommodation entities), regulatory frames about touristic operators (Travel agencies, HORECA entities) and intensive marketing communication campaigns.

There are important strategic decisions made on building Kukes Airport (North Albania for low cost flights) extension of the main capital airport in Rinas, additional airports in South (Vlora and Saranda) to create faster access to coast area, Rail way from Prishtina to Durres, Durres yachts bay to attract wealthy tourists.

On the communication strategy looks that a great part of it has been covered on the “testimony approach” technique. High government bodies have weighted the strength of the promo message as Prime Minister, Minister of Tourism on social media and other digital channels. International influencers as Dua Lipa (famous singer), Leonardo Di Capri (famous actor) or Journals like Zeit journal “Albanische Riviera” from Victoria Morasch 15/08/2022; Paul Bradbury Total Croatia news CEO; “It’s time to talk about Albania, published 17 August 2022;  and international events like UEFA EU Conference League Final football match, Tirana European Youth Capital for 2022, have amplified the name of Albania into the international arena to raise awareness and push curiosity to come in Albania.

Let’s have a short overview of some statistics on the current situation of tourists and tourism in Albania according to INSTAT source of information to evaluate how these efforts with the goal of increasing inflow-s of tourists in the country have been reflected so far.

On table 1 “Entrance of Individuals in Albania”. During June 2022 there were 1.359.501 people coming in Albania which represents an increase of 44,6 % compared to June 2021. Foreigners count 876.056 people which represents an increase of 45,0 %, compared to June 2021. (tab.1).


Foreigners traveling to Albania for vacations purposes shows an increase for June 2022 vs June 2021 of 47.7% while as semiannual 52.6% (Table 3)



According To INSTAT, the ways these individuals came in Albania were distributed as shown in the table below and 76% is by land and has an increased trend of 35% compared to 2021.

Europe is the main source of tourists visiting Albania taking up a volume of about 92.4% of all
tourists while recently tourists from the United States of America, or Asia, and especially China, have shown a significant increased interest. They consume both mountains and seaside tourism as a full exploring tour of wild places with virgin natural beauty as north mountains (Tropoje, Theth) and canoe in Vjosa River well known and promoted by Leonardo di Caprio for its unique characteristic worldwide.

Road accidents have caused 141 injured and 14 died persons and the main cause of them on 90,8 % of the cases is “driver attitude” (table 2 Road accidents as for the road users) ; 27.6% of them are caused by drivers at the age of 25-34 years old (table 3 Road accidents as for the age of driver”)

This year have been reported several accidents on the seaside caused by water motors in South Albania with injured and died tourists on the shore or within the swimming perimeter. It has been as a root of security problems at the seaside even the missing of Baywatch staff.


According to “Legatum Prosperity Index”, Albania is 69th in the overall Prosperity Index rankings and specifically on the table no__ at annexes has done improvements at Safety and Security component.

According to, Albania is ranked green as “normal security precaution” considering mostly the crime, burglary parameters and not the frequency of unexpected events related to financial cost for health issues or material damages caused by these events.

The latest value from 2022 is 4.5 index points vs 10 points the highest according to Global economy index


In reference how to increase the inflow of tourists let go into a different angle of analyses and see what the decision-making drivers for people are to travel toward a destination. By knowing the decision-making drivers of tourists, we can build strategies and perform actions on effecting and channeling that demand toward Albania.

The COVID-19 and all viruses’ varieties afterward, kept the unsecured healthy situation at alert mode. This has been reflected at a huge change of decision-making drivers to choose a destination for the current year and beyond!

According to Alex Wieteska at her article for travel tips “9 Factors to Consider When Choosing a Travel Destination during COVID-19” at Vacayou Magazine on top is mentioned “Safe” with the consideration of countries measures to keep tourists safe and what accommodation entities operate toward post covid19 situation. Source :

Expedia’s research highlights the importance of safety and financial security as key factors driving travel behaviour. They state on their research results that: “4 out of 5 travellers base their accommodation decisions on pandemic measures for health and hygiene and a safe stay a top priority. Financial security (the ability to receive a full refund) and flexibility (the option to change booking dates) are also a major consideration with nearly a quarter of families ranking this important in their decision-making. The travel landscape is still unpredictable so give your guests peace of mind and build guest loyalty by ensuring them that safety”

Ariane Gorin of the Expedia Group says: “As vaccination rates rise and borders open across the globe, people are ready and eager to travel. However, the months of uncertainty are weighing on their travel decisions and shifting the conventional belief that price is the top driver of bookings. These insights show people want to book with trusted travel providers that will deliver on their experiences, keep them safe, and protect their financial investments”. (Note: The Experian Group Traveler Value Index was created to understand the impact of the COVID pandemic on travel and the mindset of travelers, providing property managers with industry-specific insights into the shifting travel and booking behaviors resulting from the pandemic”

Source:  Article “The Top Factors Driving Travel Decisions” published September 20,2021


Based on the above customers’ behavior features I would cite two main areas that would influence the increase of tourists toward Albania:

  1. Improving accommodation and range of tourism products and services⃰
  2. Assuring safety and security of tourists

This thesis will be focused only on components linked with tourism chain of travel agencies and HORECA

  1. On the regulatory frame actually, there are mandatory criteria for licensing, monitoring and controlling the activities of travel agencies and accommodation entities. These rules have implied a clear set of criteria to be fulfilled on the logistic conditions of accommodation entities and on the liabilities coverage these stakeholders must comply with. (reference laws at bibliography)

To match those criteria and be competitive touristic business chain requires investments to upgrade their accommodation premises and/or building new ones. In the current situation businesses (Businesses are referred as all entities that perform an activity linked with hospitality of tourists as for definitions stated on the Law 93/2015 “For Tourism”; Law no 114/2017 “About some additional on the Law 93/2015”)  are directed to Banks and Microfinance Institutions to get Investment loans.

As according to Bank of Albania there is a positive trend on the level of demand for tourism purposes (accommodation and food service, art and entertainment, including insurance).reaching approximately 290 mln euro or 26% growth compare to 2021. Tourism is the 4th most credited sector of the economy with an increased demand for upgrading current premises to be classified as 4-5 stars hotel and get fiscal benefits of this ranking status. Another important point to be mentioned is that there is no any seasonality trend for this kind of loans, which means that demand for access to finance from these clients is inelastic. Anyhow what is obvious also, is the low level of weight this loan purpose portfolio takes to the total sectorial lending portfolio; for the accommodation and food service vary 4-8%, Insurance 1-3%; entertainment not more than 1%. (BOA statistics links and tables at the annexes) ).

Government through VKM no 277/2020 approved 11 mld Leke Sovereign Guarantee

for Banks in order to support the access to finance for businesses effected by Covid19 (tourism sector was on top).

As according to Albanian Bank Association, touristic businesses were skeptical to new investment because of the uncertainty of the business trend continuity and unpredictable costs they might occur as for Covid19 factors. This was explaining their attitude toward the “Sovereign guarantee” which was not used as option from them to access finance from Banks. Banks on the other side were more demanding on their risk mitigators requirements.

Source (

On various interviews with Chief Executive Officers and Chief Risks Officers of the main Banks in Albania, was very interesting to see their narrow view of requirements focused on tangible collateral, to define “a safe, healthy lending”.  This way they believe to control the provisions expenses and return of investment. They stated as the main reason of loan issuance restriction, to be the highly unpredictable income projection flow of the businesses which implies difficulties on calculating risk taking level on lending.

The situation is a vicious cycle:

  • Lenders wants the security of cash flow generation from businesses
  • Businesses wants security not to be disrupted on financial sources from unexpected and unpredictable events.

Response that address both concerns and close the gap is Insurance!

According to the Law: 9267/2013 “Insurance, Re-Insurance and Insurance & Re-Insurance Intermediaries and Law 52/2014 “About Insurance and Re-Insurance Activity”

“Insurance” means the transfer of a potential risk, financial lost or a material damage from insurer to the insurance company as for terms and conditions of the police insurance. (Clause 3 “Definitions” point 1)

“Compulsory Insurance” means Insurance for which it exists a “by Law” obligation. (pg 1, point 2)

“Voluntary Insurance” means Insurance for which it doesn’t exist a “by Law” obligation. (pg 1, point 3)

“Risk” means potential lost from an unexpected event in the future, which causes damage to the insurer.

Risk areas covered by insurance products as listed on clause 7 pg 7, point B are as below:

  • Health and accidents Insurance
  • Motoric Insurance
  • Marina and Transported Goods Insurance
  • Airplanes Insurance
  • Fire and other property damages Insurance
  • Liabilities Insurance
  • Credit and warrantees Insurance
  • Life Insurance

In simple words, Insurance means to have a tool in your hand that in case of any disruptive unexpected event that cause financial and/or material damages, businesses will partner to overcome that situation by an insurance company that will cover expenses occurred by the event leaving financials of the business “untouched” by the consequences.

This means:

  • Psychological comfort to the business owners and administrators on having a solution for the unexpected bad surprises life and business activity can bring ahead
  • Sustainability of their projected cash flow and specifically expenses as long as they will not have to pay costs of damages occurred
  • Reliability to lenders and investors feeling safe on their investments as long as business interruption causes are addressed immediately.

This is why Insurance represent the Financial Leverage for every business to face every unusual, unexpected situation, keep going sticking to their development plans, and achieve their goals and objectives on improving, extending and/or building their touristic premises at a competitive level with other countries especially the neighborhood ones.


  1. Assuring safety and security of tourists. This thesis will define the safety and security from the point of Warrantees to support Tour operators and HORECA entities’ trustworthy, reliability on what they offer or commit to deliver to their customers. As stated above at the Expedia’s research one of the fundamental requirements of tourists in nowadays is “Financial security (the ability to receive a full refund in case of any defaulted event happening), trusted travel providers that will deliver on their experiences, keep them safe, and protect their financial investments”.

By Law there are compulsory requirements for:

  • travel agencies to be equipped with Professional Liability Insurance which covers all the costs related to discrepancies on terms and conditions fulfilment of the contract tour operators have with their clients, including payment capability, bankruptcy, and all obligations in reference to the Law of Customer Protection. (Source Law no 93/2015 “For Tourism” (clause 55 and 9); Law 10081 23/02/2009 “For Licensing, Authorization, and Permissions in Republic of Albania)
  • Touristic HORECA entities to have Fire Insurance and Third Parties Liabilities Insurance/Public Liability Police (source Regulation “On requirements for registration and classification of the hotels, accommodation entities and touristic restaurants” Clause 16 pg 8 paragraph 4)  

The above legal frame assures tourists or counterparts’ travel agencies to give trust to each other as long as the insurer assures them on this commercial relationship, meaning more confidence from foreign tour operators to cooperate with Albania.

In Albania there are 12 insurance companies by which 3 of them have majority ownership from EU Insurance companies as Uniqa Group Austria (Sigal Uniqa Group Austria and Sigal Life) and Vienna Insurance Group (SIVIG) which position our country at the level of offering trustworthy credibility on the insurance area and unified insurance products with EU expectations.

This address the tourists flow coming through tour operators while others there are coming on their own (adventurer, independent profiles) looks to be lack of this information. If a google search about accommodation entities or hotels in Albania is performed, the only information shared is about logistic equipment while there is no single word about Insurance. Some few hotels are publishing general rules of Covid19 as hand cleanings but there is no any telling or showing any Insurance term on Public Liability of tourists staying at their premises and Covid19 Insurance which has been developed by two Insurance companies Sigal Uniqa Group Austria and SIVIG Albania.

Public Liability Insurance covers all damages (material and physical) caused to other people (public)as consequence of the Insurer’s business activity happened at its premises. Covid19 insurance covers medical expenses in case of covid examination during the staying in Albania.

This means that Albania might be losing tourists only because advertisement has stayed at the prior Covid19 approach while leaving prospects be driven by their assumptions on the country safety level or in the worst scenario, stopping prospects to come in Albania because of missing information and/or support on what today drives decision making of tourists to choose destinations especially if they are new and surrounded by well developed touristic countries as Albania is.

As according to Minister of Health there were around 33.000 foreign tourists hospitalized in Albania for personal accidents in the landscape’s tours in North, seaside in South, food poisoning. They got medical care for free at our hospitals considering expenses as well made for their transportation (helicopter, army involvement).

This means:

  • Budget expense for Albania government (medical care expense increase)
  • No expense for the Foreign Insurance companies that have issued health insurance for their clients as long as there are no medical invoices claimed by their clients. Albanian Government cannot claim any expense to be paid by the health insurance of the tourists because it is not stated as part of the insurance police at the issuance moment of it.
  • Tourists benefit from “bonus-malus” feature of insurance police meaning as far as they haven’t caused any expense to their insurance company, they get a lower insurance price on the re-newel moment of it.


Conclusions and Recommendations

The scope of this paper is to incentivize and a call to all researchers across the world to see more deeply at the Insurance Industry and explore the ways how insurance products can make a differentiating feature among travel destinations of tourists.

Covid19, War in Ukraine and Global Warming are showing human society that unexpected; unpredictable and ambiguity events will be the “normal” of life path across the world. This means that we have to be supported psychologically, financially, and morally by options as Insurance in order to overcome fears and move toward lights at life tunnels. Now, the challenges ahead are not just how to overcome the consequences of this unusual, unprecedented situation, but most importantly how we can get prepared for any possible one in the future.

Albania was taken as country for analyses to show that emerging countries aspiring tourism development should play smarter toward mature markets and/or new competitive ones. Unique selling preposition cannot be focused only on beautiful landscapes or existence of logistics, customer service because these are already explored and well-developed areas. The differentiation will belong to those who will offer security, liability, and trustworthy commitment. Being equipped with Insurance products in legal approach interpretation means that the Insurer has already a “partner” who will guarantee to cover his liabilities as for the events of defaulted, In the eyes of clients and specifically of tourists this is a testimony proof of their reliability.

According to the findings on Albania situation considering the aspiration of developing tourism at the scale of being by 2028, the sector contributing 9.3% of the GDP or approximately 1/3 of Albania’s total GDP, some recommendations would be as follow. Some of these recommendations would be needed to get tested with respective stakeholders which will be content for near future research papers on these topics.

Smarter advertising strategies by HORECA entities: Highlight and point out visually Insurance products they have especially those related to Public Liability Insurance and Covid19 Insurance. This will assure:

  • websites viewers and visitors not missing this valuable information
  • unique advertising tactic and being different on marketing communication from other countries around with well established tourism market (Greece, Italy, Montenegro).
  • marketing efforts efficiency by matching the decision driver of today customers (security and safety) with the priority feature advertised by HORECA entities.
  • be positioned “different” at customers ‘perception and getting more attention and assure higher probability of being destination of choice of tourists.

Smarter Advertising strategy from Albania Government: apply 20/80 Principle by focusing marketing communication to markets as Germany and Grand Britain. These tourists are wealthy and “explorer” profile which means there is a good opportunity they choose Albania as a new country with very similarities to Greece and Italy (same coast and natural beauty), matching safety expectations of them. They are eager, curious for countries with a warmer climate than theirs and with a great food quality range while are wealthy tourists that spend on their holidays. They come from countries with higher living standards compare to Albania which means in relative terms their spending is “normal” to their budget, while “upper level” customers ‘budget for Albania. This way with 20% of marketing communication budget expense Government can get 80% of the total value on the revenues coming by foreign tourists. Attracting new tourists is only the first milestone to the road of long-term tourism development but it’s the most crucial one as “there is no any second chance to make first impression” while the “mouth to mouth” and “testimony” marketing communication tactics are powerful to assure sustainable inflow of tourists in the upcoming years to make worthy all the investments made by all tourism stakeholders.

Smarter advertising from Insurance companies: Their mass communication strategies, including digital marketing channels, are mostly based on informative approach of product features. In a market where Insurance knowledge is really at the very early stages, the language of promoting Insurance Products must be by simplifying the explanations of the product focusing more at “What’s in it for me” from client’s perspective. This way the value added of each insurance product will be better understood and absorbed from clients and increase the insurance products purchases. In other words, communication strategy must change from “product centric” to “customer centric”.

Intensify at borders the advertising (in person is more effective) of travel insurance products which provides additional services as S.O.S in case of car accidents apart of those related to health and legal advisory.

Health Insurance, Personal Accidents Insurance, Covid19 Insurance must be compulsory to be provided by Albanian Insurance Companies. This will:

  • Help Albanian Government not to have increased medical care expenses for foreigners being hospitalized in Albania during their stay.
  • Insurance companies increase their turnover, meaning increase of GDP contribution from this sector
  • Tourists to have appropriate medical care coverage while accommodation entities less stress on handling unpredictable events of defaults of their clients.

Government must be a proactive formal source of displaying “touristic entities” certified respectively for their activity. Ministry of Tourism must provide an open to public website info with the list of certified tourist entities to channel flow of tourists local and foreigners into the right ones. This will assure tourist get proper services in Albania and this way they can be “ambassadors” for Albania a destination of choice to tourists creating bases for a sustainable-repeated customers’ flow. This should be promoted as well in visual formats at entry borders of the country to catch even adventures clients. On the other hand, creates “peer pressure” for the rest of the businesses to meet customer service standards and be part of that list. This “certified” chain approach will give possibilities to better access finance funds (private, international programs of EBRD, BE etc) to enlarge the business investments. In addition Financial Supervisory Authority (FSA) can display at their website all tourists service providers insured with compulsory insurance police of Public Liability Insurance in order to give a formal assurance to tourists about their safety and security on serviced provided to them in Albania.


Insurance companies to develop Insurance products on the areas of tourism development

  • Agri Insurance Products. This goes along with country development strategy of being member of EU while on tourism approach supports safety food providers on the HORECA entities. The products can be integrated with the EU certified programs for food ingredients (vegetables, fruits, dairy products, meat etc) to complete the chain of guarantees offered in Albania related to food security requirements. If the farmers and/or wholesalers of food (vegetables, meat, milk) are certified with international and/or local food security standards then these products can be accompanied by “product liability” insurance which will guarantee the hotels or supermarkets that in case of any default, all the costs will be covered by the insurance while they will keep the correct position in front of their clients without having costs on their financials.
  • Marine Insurance Products: this goes in alignment of coast area entertainment services and strategic development of yacht bay in Durres expecting a different tourist profile from what is currently visiting Albania. Get prepared for the near future means being ready not to miss any opportunity since at the moment it occurs! On the other hand, it address the recent accidents happened in the seaside to cover life insurance events for tourists on these areas.


As a final closing statement, Insurance is the mechanism designed to address unexpected events by sharing costs of the damages and respective consequences in many various ways to make people feel more comfortable psychologically on looking forward and dare to move ahead and overcome traumas like Covid19 pandemic situation.

Insurance responds to “Fears” of lost by smoothing the negative impact of the unusual situations financially and psychologically, making it the perfect financial leverage to boost businesses moving ahead and people living happily.










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  • Law 10081 23/02/2009 “For Licenses, Authorizations and Permissions in Republic of Albania”
  • Law no 93/2015 “For Tourism”
  • Regulations: VKM no 711/2016 “ Regulation of terms and conditions of building, projecting of accommodation entities” (clause 7 Fire Protection measurements, Clause 8 Protection against flood)) and VKM 243/2017 “ Procedures for qualification of 4-5 stars hotels”; “For requirements, registration and classification of hotels, other accommodation entities and touristic restaurants”
  • Regulation no 709/2016 “Requirements and criteria to exercise the activity of travel agency