Insurance market results in 2012

In 2012 Polish insurers paid 39.97 billion zlotys to clients and claimants. Nearly two thirds of this amount are benefits connected with life policies. Overall premiums in the insurance market in 2012 reached 62.6 billion zlotys of which 36.4 billion are life insurance products and 26.2 billion – other personal and non-life insurance.

Motor Insurance Market

Major figures:
• Liability motor insurance – 977 thousand indemnities and benefits paid, to the amount of 5.28 billion zlotys
• Casco (comprehensive) insurance – 706 thousand indemnities paid to the overall amount of 3.44 billion zlotys
• Gross premium written under liability insurance was 8.74 billion zlotys (an increase by 3.76 per cent)
• Gross premium written under comprehensive insurance was 5.62 billion zlotys (a decrease by 2.43 per cent)

PIU Comments:
The average indemnities and benefit under motor liability insurance in 2012 amounted to PLN 5,409 zlotys and the figure was 8 per cent higher than a year ago. This happens irrespective of the fact that the number of claims went down in 2012 by over 7 per cent. “We see fewer collisions and accidents reported to insurers, but the average indemnities and benefits are on the increase, and thus the insurers’ obligations resulting from liability insurance continue to rise,” says Grzegorz Prądzyński, President of PIU Board.

The average indemnity under casco insurance has also increased. At the moment it amounts to PLN 4,870 and it is 5.2 per cent higher than a year ago. In 2012 the number of casco insurance policies dropped by 1.5 per cent. At the moment 26 per cent of drivers hold this type of insurance.

Interesting facts:
• Most indemnities and benefits under motor liability insurance were paid in the period of January – March: nearly 279 thousand. But the indemnities and benefits paid for April-June were of the highest value: PLN 1.38 billion.
• Under comprehensive insurance, indemnities of the highest value were paid in the period of January – March (PLN 922 billion) and it was also in this period that the number of occurrences was the highest (in excess of 194 thousand)

Non-life market (exclusive of motor insurance)

Primary figures:
• the number of insurance policies covering damage caused by natural forces went down by 1.4% to 8 million, compared to 2011
• Indemnities for all insurance guarantees increased year to year by as much as 534 per cent, to the amount of 422.8 million zlotys
• The number of claims caused by natural forces in 2012 was 259 thousand. As a consequence, the claimants were paid 1.15 billion zlotys

PIU Comments:
Occurrences caused by natural forces, which we saw in Q3 of 2012, proved to have no major effect on the insurance market. The losses were considerably smaller than e.g. the effects of the flood of 2010. “We experience weather anomalies in Poland each year, but in 2012 these were relatively insignificant when we consider the insurance claims. Yet, the drop in the number of policies covering the effects of natural disasters is disturbing. It may suggest that we are not becoming more cautious, despite an increasing frequency of natural force occurrences,” says Grzegorz Prądzyński.
The market of 2012 was much more affected by the insurance guarantees. Related indemnities increased in 2012 by as much as 534 per cent, to 422 million zlotys. This is mainly connected with the difficult situation of the construction sector, but also with the bankruptcies amongst tour operators, which we saw last year.

Interesting facts:
• In the first half of 2012, indemnities worth 63 million zlotys were paid under guarantees. In the second half of the year, these amounted to as much as 359.5 million zlotys.
• In the class of “other material damage”, which includes, among others, mandatory insurance of crops, as much as 56 per cent of all indemnities were paid in the period of April – June 2012.
• In Q1 of 2012, the average indemnity under the guarantee was 9.6 thousand zlotys. In Q3 – it was as much 383 thousand zlotys.

Life market

Major figures:
• Indemnities and benefits under all life insurance policies amounted to PLN 25.9 billion (a drop by 0.5 per cent)
• Benefits under unit-linked products went up by 15 per cent and reached 6.66 billion zlotys.

PIU Comments:
The premium at the life insurance market increased in 2012 by more than 14 per cent, to 36.4 billion zlotys. The result was affected by two largest insurance classes: the “life insurance”, encompassing also short-term deposit insurance policies, and “unit-linked life insurance”. The premium under unit-linked policies amounted to more than 12 billion zlotys in 2012 and was nearly 17 per cent higher than a year ago. The same increase was seen in the number of agreements.
The premium under “life insurance” class was PLN 19.3 billion, i.e. 15 per cent more than a year ago. This is mainly the result of increased sales of term deposit insurance policies. Several months ago PIU estimated the value of their sale in 2012 to be PLN 6 billion. However, full financial results for 2012 indicate that the value is higher and reaches 7.5 billion zlotys. Single contracts related to the sales of said policies frequently generate substantial written premium, hence each attempt at assessing the market value carries the probability of a significant error.

Net financial result

The net profit of life insurers in 2012 was PLN 3.27 billion and it was 12.4 per cent better than a year ago. Property insurers ended the year with a profit of PLN 3.38 billion, i.e. 9.7 per cent higher year-to-year.
In 2012 an improvement was recorded of the technical result (on core activities) for property insurers. Despite this fact, the largest insurance class of liability motor insurance is still yielding losses (PLN 427 million in 2012). The loss is smaller than in 2011 (PLN 638 million). Comprehensive insurance still remains profitable, and the technical result thereon increased more than twice over the year, from 336 to 725 million zlotys.

Table with results