Insurance market results after 1Q 2011

In the first quarter of this year, non-life insurers paid over PLN 3.4 billion to their clients – as results from the data collected by the Polish Insurance Association. Claims paid of life insurance amounted to almost PLN 5.8 billion. The first quarter of this year was marked by motor vehicle insurance and adjustment of rates to market conditions.

Motor insurance market

Third party liability premiums amounted to almost PLN 2 billion and collision insurance premiums exceeded PLN 1.4 billion. The year on year growth in both cases was 14 % – The growth of about fifteen percent of the collected premiums shows that insurers could no longer accept losses incurred in relation to motor vehicle insurance. They decided to adjust the rates to difficult market conditions. It is obvious that some drivers will not be happy with that decision, but we must remember that insurers are obliged to be able to compensate losses by skillful adjustment of prices to the risk level –Jan Grzegorz Prądzyński, President of the Polish Insurance Association says. In 1Q 2011, insurers paid PLN 1.4 billion for third party liability and PLN 1 billion for collision insurance. These values are similar to those of the previous year. In 1Q 2011, for the first time over a considerable period, we saw the value of the collected premiums increase faster than the value of the compensated losses.

Non-life insurance market

On the non-motor non-life insurance market, the greatest participation of compensation paid are, as usual, insurance related to fire and other elements. In groups of smaller participation, we can observe an increase in compensation in assistance insurances and insurances related to various financial risks. Insurers collected approximately PLN 3 billion from non-motor non-life insurances, about 9 % more than in the previous year.

Life insurance market

We can observe a continuing decrease in premiums collected in Class I on the life insurance market. According to the analyses of the Polish Insurance Association, it is directly connected with the structure of premiums of one of the big insurance companies, and not with the situation on the entire market.

The premium in Class III increased considerably though. – This can be explained by a good situation on the stock exchange, which usually means greater interest in saving by way of locating one’s money in insurance capital funds – Jan Grzegorz Prądzyński says.

At the same time, a big group of clients decided to close out their saving and investment policies and consequently there was a considerable 32% increase in the claims paid value on this account. Altogether, life insurers collected PLN 7.6 billion in 1Q 2011, which is almost the same amount as in the previous year. They paid PLN 5.8 billion, which is 16% less than in the previous year.

Balance on technical account and profit

Thanks to the adjustment of motor vehicle insurance rates to the market conditions, non-life insurers have achieved a positive balance on the technical account (PLN 131.7 million) and a net profit in the amount of PLN 313.6 million for the first time for a number of quarters.

On the other hand, life insurers have recorded a decrease in their balance on the technical account of almost 23% – to the amount of PLN 813 million – and a net profit decrease of 23 % to the amount of PLN 755 million.

The reason for this are lower profits from investments presented by one of the big life insurers.

Results of the insurance market in 1Q 2011 r. – table