5 NECESSARY FACTS ABOUT PERSONAL INJURY INSURANCE (NNW) FOR CHILDREN AND YOUNG PEOPLE

Polish Insurance Association www.piu.org.pl

After the first three quarters of 2017, Polish insurers had paid out PLN 29.6 billion in compensation and benefits to the injured and customers. This is 9% more than the year before.

Key insurance market figures after Q3 2017:

Motor insurance market

Key figures:

– Half of insurance companies still report negative results in third party liability motor insurance. Overall, the market is profitable, which is the effect of last year’s price increases. Subsequent insurance company policies for third party liability insurance will depend on the value of payments to injured parties in the future, and the value of financial provisions needed to be established for that purpose – says J. Grzegorz Prądzyński, President of PIU

Non-life insurance market (Section II excluding motor vehicle insurance).

Key figures:

– The consequences of this year’s storms can be at least partially compensated for by compensation paid out by insurers. According to PIU data, approximately 60% of Polish households are insured – says Andrzej Maciążek, Vice-president of PIU.

Life insurance market

Key figures:

– The increase in the premium on life insurance is, above all, an effect of the sale of investment and savings-type policies – says J. Grzegorz Prądzyński.

Insurers’ financial results

The income tax payable by Polish insurers for the first three quarters of 2017 amounted to PLN 876 million, and the tax on assets – approx. PLN 450 million.

Table of results

The Polish Insurance Association (PIU) presented a report called ‘How insurance changes Poland and the Poles’ <DOWNLOAD REPORT>, describing the impact of the insurance industry on people’s lives, on the economy and companies. Polish insurers give two million Poles access to health insurance, protect PLN 1.7 trillion worth of company assets and create 225,000 jobs. The PIU report is the first of its kind in Central and Eastern Europe.

Economic potential
Insurance does not only have a direct impact on people, but also protects their health, life and property. It is also a key component of the economy. According to the report prepared by PIU in cooperation with Deloitte, insurers in Poland create 225,000 jobs, out of which nearly 200,000 are in sectors other than insurance. Jobs are created, above all, in trade, vehicle repair, financial and real estate sectors. They are created not only thanks to compensation payments but also, among other things, thanks to the purchases or investments of the insurers.

Protection of Polish family homes
Although in comparison to Western European countries our tendency to take out insurance is still low, the awareness of the threats related to health, life and property is constantly growing. In 2016 approx. 60% of homes were covered against natural disasters. Protection against fire, explosions and natural disasters provided by the insurers yielded PLN 1.3 billion worth of compensations in 2016. Additionally, PLN 1.5 billion was paid out, among other things, for damages caused by hail, frost and all types of thefts.
– Without insurance the quality of our lives would fall drastically. We would have to dip into our savings for every fortuity, and the cost of most of these fortuities exceed the savings of an average Pole – says Jan Grzegorz Prądzyński, President of PIU.

Protection of life, health and old age pensions
In 2016 as many as 4.5 million people received life insurance benefits. This is a key support for families in the face of major tragedies, such as the death of an immediate family member. Life insurance also plays an important role in accumulating long-term savings. By saving regularly we can increase our old age pension by even 25%. This is all the more important as in the near future we will live for 23 years after retirement. In the context of demographic change, it is also essential to stay healthy for as long as possible. Thanks to insurers, 2 million Poles are able to use private insurance, guaranteeing themselves quick access to physicians and modern diagnostics.
– The report ‘How insurance changes Poland and the Poles’, shows that insurance is not just an important part of the Polish economy, generating 225,000 jobs, but that it is an institution of public trust which performs important social functions that will become increasingly important as the wealth of Polish citizens increases – says Irena Pichola, Deloitte Partner, Sustainability Consulting Central Europe Team Leader.

Transport and travel protection
The most common type of insurance are motor insurance policies. Every year insurers pay out PLN 12 billion worth of compensation for accidents, collisions and stolen vehicles. We also travel abroad ever more frequently in our own vehicles (not only cars). In 2017 as many as 4.2 million people spent their holidays abroad. The report prepared by PIU and Deloitte shows that we are becoming ever more aware tourists. The cost of travel benefits paid out in 2016 amounted to approx. PLN 170 million. This amount covered the costs of treatment, lost baggage and patient transport.

Less risk in running a business
The insurance sector is not only about protecting private property, but also property and financial insurance for companies. In 2016 insurers covered a turnover of companies worth PLN 460 billion, i.e. the equivalent of a quarter of Poland’s economy. Along with the expansion of Polish companies abroad, the need to protect their business in other countries increases. Last year more than PLN 114 billion worth of Polish export was insured. Insurance also covers 60% of Polish companies’ assets. The sum insured for all the assets of the companies in our country amounts to PLN 1.7 trillion. The report prepared by PIU and Deloitte is the first document to specify this value.

A full version of the report is available HERE, as well as on the website dziekiubezpieczeniom.pl.

During Congress 590, one of the most important economic events in Poland, the Polish Insurance Association (PIU) will present the first document in Poland describing the impact of the insurance industry on the economy. The document shows that the sector generates 2% of the Polish GDP, insures 60% of the assets of Polish companies and generates 225,000 jobs.

There is no economic growth without insurance
Reduce uncertainty, protect assets and health, ensure financial support and long-term investment for the economy – these are the tasks carried out by insurers. Thanks to this, the industry generates a total of 2% of the Polish GDP – according to the report ‘How insurance changes Poland and the Poles’, prepared by the Polish Insurance Association in cooperation with Deloitte.

– There would be no long-term economic growth in Poland without insurance. If companies want to enter new markets, they must use various forms of protection. Insurance makes sure that the risk associated with company operations, investments and export is reduced. Insurers are already protecting the turnover of Polish companies worth PLN 460 billion – says Jan Grzegorz Prądzyński, President of PIU.

The impact of the insurance industry is illustrated by the most important industry indicators:
•    PLN 1.6 billion worth of taxes collected in 2016,
•    225,000 jobs in the industry and other sectors of the economy,
•    2% of total contribution to Poland’s GDP.

Thanks to insurance, companies and individuals within the Polish economy are producing more goods and services. – We hope that the report will be the subject of an open dialogue with stakeholders because the impact of the insurance industry on the Polish economy is huge. The added value being generated by the sector amounts to PLN 36 billion. This is a potential which can be utilised even better – Irena Pichola, Deloitte Partner, Sustainability Consulting Central Europe Team Leader, comments on the results of the report.

Investors and security guarantors of Poles

As the second largest domestic investors in treasury bonds, insurers invest as much as PLN 60 billion in them. Additionally, they buy shares in companies worth PLN 17.4 billion, providing not only capital for corporate development but also financing public spending on infrastructure, education or health. The insurance industry gives Poles a sense of security at every stage of their lives. Only in 2016 it paid out PLN 18.3 billion from life insurance policies. It also covers 2 million Poles with health policies. Protecting life, health and property; travel security, broader access to healthcare or support in saving for retirement, and safeguarding the future of loved ones are important elements which affect the well-being of society.

During Congress 590, PIU will present the economic section of a broader study called ‘How insurance changes Poland and the Poles’. The full report will debut in November and will show the impact of insurance on the life of an average Pole or entrepreneur.

An short version of the report is available HERE.

As many as 2.1 million Poles already have private health insurance which provides access to prevention, quick diagnosis and therapy without the need to wait in long queues. The most recent Polish Insurance Association data show that the number of people with health policies increased after Q2 2017 by 26%. The large majority are still people with group insurance, usually provided by their employer. However, the number of people taking out individual policies is growing very rapidly (by 58% YoY).

Commentary by Dorota M. Fal, adviser to the Management Board of the Polish Insurance Association:

Poles are seeking help on their own
Health has an unrivalled value for nearly 60% of Poles. Due to low state expenditure, we spend more and more private money on health and look for new ways to guarantee ourselves and our closest family members high quality medical services. Poland is among the countries which spend the least on healthcare – only 4.4% of GDP. The average spending in the EU is almost 8%.
Despite our readiness to co-pay for medical services, we spend most of the funds ineffectively, frequently on medical agents and procedures with an effectiveness that has not been proven. – We spend more than PLN 35 billion on healthcare from our own pockets, and according to some reports, even near PLN 40 billion – says Dorota M. Fal, adviser to the Management Board of the Polish Insurance Association – In Poland we lack systemic solutions which would facilitate the effective management of those funds. Experiences in many countries show that the best, most effective and widely available method for managing the health budget are insurance products which additionally contribute to the reduction of queues in public healthcare – she adds.

Antidote to queues
– Longer queues in the public healthcare system are caused by the growing demand for healthcare services. It is the result of an ageing population – the entry of people from the baby boom at a time of increased demand for healthcare. Healthcare costs are also affected by the emergence of ever-newer and more expensive medications and other medical technologies. Additionally, a totally free and poorly regulated access to healthcare services leads to, among other things, the excessive use of public healthcare by some patients. Healthcare system reform should include mechanisms which will enable people to take matters into their own hands and to take out private insurance – says Dorota M. Fal.
Effective healthcare profits the employer and the state. Despite the lack of appropriate regulations to support the development of the Polish private health insurance market, the number of people with this type of insurance is growing. These include not only private individuals but also employers who see value in the wide availability of private healthcare services for employees. Every employee illness is a cost for employers and the state budget. Additional health insurance is an investment in work without interruptions or sick leave, and with high efficiency.

WHOLE MARKET Gross premium written [PLN] CUMULATIVELY Number of insured [persons] CUMULATIVELY
individual insurance group insurance individual insurance group insurance
2Q 2016 37,407,382 226,145,586 314,210 1,359,505
2 Q 2017 41,162,204 276,021,267 495,788 1,619,382

New trends have emerged in insurance fraud. Increasingly high levels of detection mean that criminals are looking for new ways to commit crimes. An analysis of their methods shows that they are increasingly using life insurance. New challenges associated with cyber security are also included in Section I. In Section II, insurance companies are observing a renaissance of certain seemingly forgotten methods of motor insurance fraud. Overall, the number of offences is dropping but their value has increased systematically over the last few years. We present the latest analysis of data relating to offences detected in 2016.

 

Insurance fraud in Section I

In Section I, insurance company employees observed a 12% drop in the number of offences (from 836 to 738), however, the value of offences detected increased by 21% from PLN 11,343,955. These include both cases classified as attempted as well as actual fraud, identified in the course of internal procedures and reported to law enforcement agencies.

In 2016 in Section I, insurance companies paid out PLN 18.3 billion in the form of benefits. The irregularities detected account for approx. 0.2% of the sum paid out. The average value of a case of life insurance fraud exceeds PLN 18,000.

For years, the most common and most serious crime, in terms of value, has been the extortion of benefits for the death of the insured party. In 2016, the proportion of this method reached a record high of 80%. In 2016, cases associated with hospitalisation, surgery, disabilities and health impairments caused by accidents were also frequently detected.

Methods used by the perpetrators

A very popular fraud method detected was the reporting of false circumstances relating to injuries. This particularly applies to people participating in sporting activities. Dishonest customers – professional sportsmen or women, report false information to avoid a refusal to pay benefits because their sports discipline is subject to being excluded from liability.

It should also be pointed out that in 2016, record-breaking levels of fraud outside the area of direct payment of benefits were observed. High values have been observed in this area for several years, however, until now they did not exceed PLN 10 million – in 2016 they amounted to PLN 19 million.

New challenges

In Section I insurance companies are facing new challenges associated with generational change and cybercrime. The different requirements of the future Y and Z-generation customers herald a revolution in the life insurance market. There will be problems that have long been known in the banking sector including, among other things, the theft of the identity of insured people in order to misappropriate the benefits due to them. New electronic channels of communication with customers pose many threats associated with the correct identification of the customer.

Insurance fraud in Section II

In Section II the number of offences dropped by 28% but the value of the crimes increased by 18%. In 2016, employees of Section II insurance companies recorded 9,515 offences totalling PLN 211.9 million. The average value of the crime amounted to approx. PLN 22,000. The total value of the cases accounts for 1.15% of the value of the compensations and benefits paid out.

Methods used by the perpetrators

In 2016 approx. 1,800 attempts to extort benefits for personal losses for the amount totalling nearly PLN 24 million were detected. Similarly to 2015, survey participants have been reporting a drastic increase in the value of personal losses for several years. This applies to increasing the extent of bodily injuries being declared, simulating mental illnesses resulting from alleged post-traumatic shock, and increasing the number of people injured in accidents by making false declarations. Luckily this kind of practice is not very successful.

Insurance companies are also observing a renaissance of certain seemingly forgotten methods of motor insurance fraud. A method of deliberately causing damage has recently been revived. One of its frequent variations, used by specialised perpetrators, is damage on roundabouts and complex crossroads in large cities. The perpetrators take advantage of the mistakes and distraction of other drivers and cause a collision in which they are the aggrieved party. Next, the cars – loss generators – are fixed temporarily and used again. Thanks to data analysis methods, insurance companies are able to easily detect this dirty business.

New challenges

Insurance companies must prepare themselves soon for, among other things, the technical revolution of distributing and processing insurance tasks. An exceptionally fast development of mobile devices and fintech/insurtech solutions poses completely different requirements. Cybercrime and socio-technical threats known in the banking sector generate completely new challenges for anti-fraud teams and systems.

Cross-border crime is also an important challenge. Insurance companies should prepare themselves to check documents and identities of potential customers – non-residents.

Detailed information can be found in the analysis of data relating to offences detected in 2016 in connection with the activities of insurance companies that are members of the Polish Insurance Association. >>>

More than 3,000 people die on Polish roads every year. Every fifth Pole aged between 10 and 30 who died did so as a result of a road accident. The ‘Strategy for improving road safety in Poland’, prepared by the Polish Insurance Association, presents a thorough analysis of the current state of accidents on our roads. It also offers solutions which may effectively reduce the number of people killed in road accidents.

On 6 September, during the 27th Economic Forum in Krynica-Zdrój, the Polish Insurance Association presented a report called ‘Strategy for improving road safety in Poland’. – In this document we propose a coherent programme to improve safety on Polish roads. We propose 20 initiatives which may contribute to reducing the number of road accident fatalities by two thirds by 2030 – says J. Grzegorz Prądzyński, President of PIU.
The report shows that the social and economic costs of the accidents amount to PLN 50 billion, which accounts for 3% of the Polish GDP. This would finance the construction of 500 km of motorways or would cover the 6-year budget of the Polish police. The rate of fatal road accidents (number of fatalities per 100,000 inhabitants) in Poland is one of the highest in Europe, and is 50% higher than the EU average – at 7.7. In comparison, the rate in one of the safest countries – Great Britain – is less than 3. In the EU we are ranked sixth from the bottom and in terms of these statistics we are doing worse than the Czech Republic or Hungary. Road accidents are also the most common cause of death for young Poles – they are responsible for every fourth death in the 15–24 age group. The overall death rate of young Poles is 60% higher than in other European countries, and road accidents are one of the main reasons for this difference.

PROFILE OF THE PERPETRATOR OF A FATAL ACCIDENT                                       
Statistics show that the most common perpetrator of fatal accidents in Poland is a young, sober male who resides in Podlaskie Province. The report shows that 86% of perpetrators are males. 11% of perpetrators were under the influence of alcohol. In the last 10 years this rate dropped in Poland by 40%.  The highest fatality rate related to road accidents can be observed in north-eastern and central regions. The worst rate was recorded in Podlaskie Province – where statistically 10.5 per 100,000 inhabitants are killed in road accidents.
Excessive speed – still the most frequent cause of accidents – kills approx. 900 people a year. Paradoxically, such accidents usually occur in good weather conditions, during summer holidays and in non-built-up areas. Most fatal accidents are caused by drivers driving 10–20 year old vehicles. – Together with the age of the vehicle, the probability that the accident, if it occurs, will be fatal, increases. The main reasons are outdated safety features and poor technical condition – says J. Grzegorz Prądzyński.

ROAD TO SAFETY
Based on the analyses conducted for the purpose of the report, the Polish Insurance Association proposes the development and implementation of a comprehensive strategy for reducing the rate of accidents on Polish roads – Road Safety Improvement Programme 2030 (BRD Programme 2030). Its aim is to reduce the fatality rate to 2.7, i.e. maximum 1000 fatal accidents a year.
– An example to follow could be that of Portugal or Slovakia which had a similar or worse situation on the roads in the 90s, but by implementing appropriate solutions they significantly improved the safety of their citizens – explains J. Grzegorz Prądzyński and adds: However, the implementation of an appropriate programme requires the strong and united involvement of public institutions and the media. Effective ideas should be developed by road safety, education and marketing specialists.
Through the publication of the report, the PIU wants to initiate general changes in road safety. The initiatives proposed by the PIU are divided into the following categories: legislation, law enforcement, infrastructure and education. The Association calls, among other things, for the possibility to price third party liability insurance based on traffic fines and penalty points for drivers. – This approach makes it possible not only to punish traffic offenders but also to reward safe drivers. This will also contribute to increased road safety because drivers, aware of a higher insurance premium for dangerous driving, will drive more safely – says J. Grzegorz Prądzyński.

The PIU also calls for:

Of course, there are more initiatives, and they are all described in detail in the report. – Our publication could be the beginning of the creation of a comprehensive Road Safety Improvement Programme by 2030 – says J. Grzegorz Prądzyński.

Brochure with the key data

BRD report

ABOUT THE REPORT:
The ‘Strategy for improving road safety in Poland’ report, presented by the Polish Insurance Association constitutes an independent look at the issue of road safety (BRD) in Poland. The report was prepared on the basis of publications by institutions such as: the National Council for Road Safety, the World Health Organization, the Organisation for Economic Co-operation and Development, the World Bank, PIU reports and analyses conducted by McKinsey & Company, and cross-sectional statistical data from the Accident and Collision Registration System and from Eurostat. Based on analyses, PIU presents the Road Safety Improvement Programme 2030, which aims to reduce the fatality rate on Polish roads by 2,000 people a year, i.e. by nearly 70%.

We invite you to study the most recent PIU report describing the bancassurance market in Poland after Q2 2017.

In Section I (life insurance) PLN 4.3 billion worth of premiums were collected after Q2 2017, in comparison to PLN 4 billion collected a year earlier. Bancassurance accounted for 35% of the overall premium written in life insurance.

In Section II (other non-life insurance) PLN 0.85 billion worth of premiums were collected after Q2 2017 in the bancassurance market, in comparison to PLN 0.87 billion collected a year earlier. Bancassurance accounted for 4.9% of the overall premium written in Section II.

Report

On 9–10 May 2016, the 5th Congress of the Polish Insurance Association – the most important discussion forum for the insurance industry in Poland, gathering representatives of the parliament, government administration, financial supervision and insurers in Sopot every year – was held. This year’s Congress was visited by a record number of guests – more than 260. The Congress was opened by:

This year’s meeting included most predominantly discussions on the insurer’s impact on the environment, security, reputation, innovation in insurance and legal regulations related to insurance intermediation. The Speaker of the Polish Sejm, Mr Marek Kuchciński, addressed a letter related to the Congress to the President of the Polish Insurance Association.

Letter from Mr Marek Kuchciński, Speaker of the Sejm of the Republic of Poland

Photos from the Congress and videos presenting individual discussion panels will be provided on the PIU website soon. Presentations delivered during specialist panels of the 5th PIU Congress are available below. They were dedicated to:

– The impact of insurance on the economy and society and announcement of a future PIU report in this respect
– Traffic safety and announcement of a future PIU report in this respect
– Innovation in insurance
– New regulations on insurance intermediation

On 10 May 2017, the General Assembly of the Polish Insurance Association granted the “In recognition of service to the insurance industry” awards. This is an industry-specific award granted to a person working in the interest of the insurance sector, including researchers dealing with the subject area of insurance or promoting knowledge of insurance, as well as to other natural or legal persons who have significantly contributed to the development of insurance in Poland.
The awards have been received by: