Insurance market after the third quarter of 2011

According to data compiled by the Polish Insurance Association throughout the last three quarters of this year, insurers paid out PLN 10.3 billion as compensation to their customers. Benefits provided under life insurance reached PLN 19.4 billion. Both within life and non-life insurance markets, we can observe an increasing premium income.

Motor insurance market
The value of claims associated with liability insurance amounted to PLN 4 billion, whereas comprehensive motor insurance amounted to PLN 2.8 billion. Total compensation under motor insurance equals 66 % of all withdrawals within non-life insurance market. Insurers continue to record a technical loss in the area of liability insurance. At the end of September, the loss amounted to PLN 398 million. Costs of compensation for the recent years’ victims have significantly increased, hence the need for prices adjustment. Insurers are obliged to implement a conservative financial policy in order to guarantee due compensation to all victims. Therefore, it is impossible to tolerate a long-term technical loss within such a fundamental business line as liability insurance – explains Jan Grzegorz Prądzyński, the President of the Management Board of PIU. Adjusting insurance prices to market conditions could be observed on the Polish market for months. Data compiled at the end of third quarter confirm this trend. At the end of September, insurance premiums collected under liability insurance amounted to PLN 6.4 billion and were 15.4 % higher than last year. Comprehensive insurance premium exceeded PLN 4.2 billion, which indicates an increase by almost 13 %.

Non-life insurance market (except for motor insurance)
Within class II, in addition to the transport segment, the most visible factor is a decrease (by more than 40 %) of compensation relating to insurance against fire and other natural forces. This is natural, due to the fact that last year’s high amount of compensation was primarily a result of flooding. This year, fortunately, we were not affected by natural forces of similar size. However, damages of the past few days, caused by strong wind, show how important it is to appropriately insure one’s assets – says Jan Grzegorz Prądzyński.

Life insurance market
This market is still characterized by the increase of unit-linked insurance premiums (by 30 %, to PLN 7.6 billion), but it is no longer as dynamic as at the end of June. Then the annual growth rate reached 40 %. At the same time, the stock market situation is reflected in the increase of benefits associated with investment policies. In capital fund insurance, the value of benefits amounted to nearly PLN 4.2 billion, by 24% more than last year. Marginally lower premiums can be observed in class I, which includes conventional life insurance, structured products, and the so-called policy-investments. The decline in this class has reached 3.7%.

Net income from life insurance, which amounted to PLN 2.27 billion, was 21% lower than last year. The main reason for lower profit was the decline in investment income. Non-life insurers’ profits amounted to PLN 940 million (last year a loss of PLN 30 million), minus dividends paid each year for the biggest Polish insurer by its subsidiary. Adding this dividend to the result, non-life insurers’ profit exceeded PLN 2.9 billion.

Precise figures on the insurance market after the third quarter of 2011 can be found in the table below.

Insurance market after the third quarter of 2011