PIU presents data on insurance market for the 1st quarter of 2010

The persons insuring cars, houses and any other type of property, received indemnities from insurers amounting to approx. 3.4 billion PLN in the first quarter of 2010, as results from the data collected by the PIU. Life insurance benefits reached the amount of approx. 7 billion PLN. The first quarter of this year was dominated by the losses caused by the long and frosty winter.

It results from the data gathered by PIU and covering approx. 99 per cent of the Polish insurance industry, that the sector increased its gross premium written in the first quarter of this year by 3.4 per cent in case of non-life segment and by 4 per cent in life business, as compared to the first quarter of the last year.

Worse technical results in the segment of non-life insurance which could be observed in the second half of 2009, were also shown in the first quarter of this year, mainly due to the increase of the costs of indemnities; technical loss of non-life insurers amounted to approx. 337 million PLN . Despite higher costs of benefits, the segment of life insurance reported the technical result at the level of approx. 978 million PLN, which is 18 per cent less than a year before.


Non-life market

The highest share in the collected premium amounting to 5.8 billion PLN is that of motor insurance products. This type of insurance has shown a drop (by nearly 1 per cent) reaching the level of 1.75 billion PLN for MTPL (a drop by 1.45 per cent) and 1.2 billion PLN for AC (a growth by 0.22 per cent).

Such a growth of non-life insurance premium in the first quarter of this year was derived from other product groups, especially financial insurance, TPL and property insurance, except for motor products.

Frost and snowfalls were the main reason of the growth of indemnities paid to non-life insurance clients in the first quarter of this year. In total, the amount of approx. 3.4 billion PLN was paid, which is 15 per cent more than in the same period of last year.

The growth of indemnities was connected with both losses in houses and apartments (snow and inundations) and motor losses. The growth of motor indemnities was caused not only by typical road events related to the long and snowy winter, but also the damages caused by ice and snow falling from roofs and events related to the discharge of batteries at frost time, i.e. the assistance services.

We cannot leave out the costs of personal injuries within MTPL cover which are growing continually, and the need of provisions being created by insurers for such type of events, whose value is getting higher and higher (e.g. compensations). The negative technical result was compensated by returns on investment only partially, so the segment of non-life insurance closed the first quarter of this year with the net loss amounting to 30 million PLN. It should be noticed that these are the data for the first quarter of this year, so they do not comprise the flood-related claims.

– Insurance is a long-term business. You can always expect a loss abounding year to happen from time to time which is a normal phenomenon in this business. Insurers know that perfectly well and they are prepared for such circumstances – says Jan Grzegorz Prądzyński, Board President of PIU.


Life market

In respect of life insurance segment, the highest growth, as compared to the first quarter of 2009, was shown by unit-linked products. However, the amount of premiums in these product groups was significantly lower, as compared to last quarter of 2009. Thus, it is too early to announce the reconstruction of investment product portfolio, whose summit value fell in 2008.

With regard to life insurance, we also faced, although to a lower extent than in the case of non-life insurance, the growth of value of the benefits paid (+6.4 per cent). Insurance operational costs have also increased by approx. 7 per cent. Technical result for life insurance amounted to approx. 1 billion PLN for the first quarter of 2010 which was 18 per cent lower than in the first quarter of 2009. Life insurers closed the quarter with a profit of approx. 978 million PLN, which is 1.7 per cent lower than a year before.