After Q1 2024, Poles received nearly PLN 12 billion worth in insurance compensation and benefits. According to the Polish Chamber of Insurance, this is 6.3% more year-on-year. The number of insured Poles has been steadily increasing.

Key figures:

• PLN 11.9 billion for injured parties, including:
  • PLN 4.2 billion from life insurance
  • PLN 5.1 billion from motor insurance (third party only insurance + comprehensive autocasco (AC) insurance)
  • PLN 2.6 billion from other insurance
• Poles spent PLN 21.9 billion for insurance (gross premium written), 9.1% more than in the previous year
• Insurers invested PLN 100.6 billion worth of assets in domestic bonds and other fixed-income securities supporting the economy and public finance.
• Over PLN 18.2 billion worth of assets were invested in shares of WSE companies and other variable-income securities.
• Insurers paid more than PLN 450 million in income tax.

Life insurance

In Q1 2024, 23 million life insurance contracts, 11.2 million contracts concluded individually, and 11.9 million contracts concluded in the form of group insurance, were concluded. This figure is comparable to the previous year. Overall, life insurance premiums amounted to PLN 5.9 billion, which represents a year-on-year increase of 6.0%. The payments reflect the current situation related to the death rate of Poles.

– Poles are spending more on life insurance. There is a steady growing interest in protection and accident products. This is good because we should think of life insurance as a financial cushion in the event of our death or serious illness. All the more so because it is difficult for the family to survive on one salary in this situation. Poles have no savings and are very indebted – says Jan Grzegorz Prądzyński, President of the PIU Management Board. – At the same time, the share of savings and investment products is also decreasing. And this is a bad trend, especially when we take demographic changes into account. Insurance is a long-term saving instrument, in particular for low and medium-income earners. It can, for example, effectively build a financial cushion for old age – he adds.

The replacement rate in 2022 was 56.6%. When we translate this into an average salary, we will receive half of the salary after retiring, which is not enough to live comfortably and be able to finance the growing health-related needs due to ageing. This problem is highlighted by PIU in the most recent report entitled ‘Poles and Risk – How do we insure ourselves? The insurance gap in Poland’. Based on the data from ZUS, PIU concluded that we will live only half of our time after retirement in good health.

The analysis of the Polish Chamber of Insurance also shows what should be the sum insured in life insurance. It must not be lower than the amount of the commitments outstanding and it should facilitate the survival of the family for several months to even a few years, depending on the ability to earn of the main household member. In the event of a critical illness, the amount of the benefit should cover the additional costs of medical treatment, rehabilitation, or the change of a job to a less onerous one. Assuming the average remuneration, debt and savings of Poles, the average sum insured in case of death should be approx. PLN 330,000.

– Building the resilience of families in the event of death or serious illness and long-term savings are essential. Let’s not forget that life insurance is also a source of long-term capital which is more resilient to all kinds of crises and economic cycles than the capital held by banks. This is why good conditions have been created in Western Europe for the development of insurance so that the capital invested in those products is the anchor for the economy. Thus, reducing the gap in this area not only strengthens Polish families financially, but it will also bring real economic benefits. We would like tax incentives for life insurance similar to those that apply in Western European countries. The employer could include the group policy paid for the employee in tax deductible expenses and thus reduce its tax. The employee could be exempt from income tax in connection with the financial gain obtained due to the group insurance – says Jan Grzegorz Prądzyński.

Motor insurance

As far as property insurance is concerned, motor insurance accounts for the largest share of compensation payments. Compensation and benefits under mandatory motor third party only insurance amounted in Q1 2024 to PLN 3.03 billion and were 13.2% higher year-on-year. At the same time, despite the increased costs of claims, the average premium under motor third party only insurance increased by just 3.7% and was PLN 527. The average claim under motor third party only insurance increased by 12.7% year-on-year, and it amounts to PLN 9,960 after Q1 2024.

– We expect adjustments in motor insurance. Inflation, rising costs of claim adjustment, including medical procedures, must be reflected in premiums, to which insurers are obliged by regulations and supervision. We expect motor insurance prices to increase faster in 2024 – says Jan Grzegorz Prądzyński.

Compensation under comprehensive autocasco insurance amounted to PLN 2.1 billion, i.e. 19.8% more year-on-year.

Other property insurance

After Q1 2024, compensation related to natural elements and other property damage amounted to PLN 0.9 billion, i.e. only 1% more than in the previous year. The 1Q 2024 was relatively calm. – A calm first quarter of the year should not relax our vigilance. As early as in April and May, we received more than 20,000 claim reports relating to the wave of frost. Climate risk is our constant companion in varying intensities. On average, we have 49% of insured properties, however many of them are underinsured. Market estimates show that this refers to as many as 3 out of 10 real properties. The underinsurance is even several dozen per cent. In the face of the changing climate, insurance is the only way of ensuring some compensation for the losses we may suffer as a result of violent weather – says Andrzej Maciążek, Vice-President of the PIU Management Board.

Profits in 2023

In Q1 2024, insurers paid over PLN 450 million in income tax to the state budget. During this period, they earned a net profit of PLN 1.7 billion.