12 September 2011

Data collected by PIU suggests that in the first half of this year non-life insurers paid out just under PLN 7 billion to their clients. Life insurance benefits reached PLN 12.3 billion. As compared to 2010, which was a very difficult year, one may describe the present situation on the insurance market as stable.

Motor insurance market

MTPL insurance premiums exceeded PLN 4.1 billion, while the total amount for motor hull insurance reached almost PLN 2.9 million. In both cases a year-on-year increase of ca. 15 percent was noted, stemming from the adjustment of rates to difficult market conditions, which had been already been visible in the preceding quarters. The indemnity values, which have been on the rise for several years, combined with stable insurance prices, resulted in losses which companies could no longer accept. — The basic duty of an insurer is to guarantee to the clients the security of money that is disbursed and deposited. This is made possible by adjusting prices to the risk level. We should remember that the group which is always most affected by price increases is the irresponsible drivers who cause accidents. That is why it pays off to drive safely — says Jan Grzegorz Prądzyński, President of PIU Management Board.

As part of the motor insurance segment, companies paid out PLN 2.7 billion-worth of compensation under MTPL and almost PLN 2 billion under motor hull insurance.

Non-life insurance market (excluding motor insurance)

Apart from the motor segment, another segment with the biggest share in section II was that of policies against fire and natural disasters. In this class, too, an increase in the collected premiums was visible – from PLN 1.4 to 1.69 billion. This increase might, too, have been a result of the necessity to adjust rates to market conditions, especially in the context of last year’s floods, in the wake of which insurers had to pay out indemnities amounting to ca. PLN 1.7 billion.

Life insurance market

As regards the life insurance market, the decrease in premiums was halted within class I (protection products, short-term bank policies, structures). The premium for these types of products amounted to PLN 9.2 billion and exceeded the previous year’s sum by 1.2 percent. A significant increase was also observed in class III (unit-linked products). The premium in class III came to PLN 5.2 billion, which means an increase by as much as 40 percent as compared to the previous year. – I would like to see these figures as evidence that more and more people are thinking not only about security, but also about making savings towards their pensions. It is worth remembering that investment policies are long-term products. They work best if given a dozen or so years or even several decades – says Jan Grzegorz Prądzyński.

At the same time, there is still a large group of clients who choose to close their savings and investments policies, as evidenced by the substantial, 30-percent increase in the value of benefits under such products.

The technical result and profit

Both life insurance companies and non-life insurers achieved a positive technical result (it is the result from their core business). The net profit from life insurance amounted to PLN 1.7 billion, representing a decrease by 7.9 percent as compared to the previous year. The profit recorded by non-life insurers came to PLN 2.6 billion, that is almost 15 percent less than the previous year’s figure. It should be pointed out that the actual picture of profits on the non-life market is heavily influenced by the dividend paid on a yearly basis to the biggest Polish insurance company by its subsidiary – a life insurer. This dividend not included, the profit recorded by the non-life market at the end of the first half year would come to PLN 666.17 billion.

Detailed numerical data concerning the insurance market after Q2 2011 can be found in the table attached to this release.

Table: results for Q2 2011