Results of the insurance market after Q3 2013

Polish insurers paid more than PLN 28bn worth of claims and benefits in the first three quarters of 2013 to clients and the injured.

Interesting figures after Q3 2013:

• The total premium in the insurance market amounted to PLN 43.3bn (a decrease year-to-year by 7.7%)
• The total claims and benefits paid amounted to PLN 28bn (a decrease year-to-year by 3.91%)
• The average claim paid under motor third party liability insurance increased year-to-year from PLN 5,369 to PLN 5,389
• Benefits under unit-linked insurance increased year-to-year by 15.6% (to PLN 5.4bn)

Motor insurance market

Key figures:
• Third party liability insurance – 725 thousand claims and benefits paid for the overall amount of PLN 3.9bn.
• Comprehensive insurance – 538 thousand claims paid for the overall amount of nearly PLN 2.6bn
• The gross written premium in third party liability insurance amounted to PLN 6.2bn (a drop by 5.57%)
• The gross written premium in comprehensive insurance amounted to PLN 3.9bn (a drop by 6.53%)

PIU Comment:
A tendency can be seen on the third party liability insurance market to an increasing average payment. The number of damage reported remained at a practically unchanged level. An insignificant decrease in the number of policies (by 1%) can be seen in comprehensive insurance and a similar decrease in the number of damage reported. The technical result on comprehensive insurance was PLN 367m after three quarters of 2013 and it was approx. 27% lower than a year ago.
The technical result on third party liability insurance was PLN 106m, compared to the loss of PLN 77m a year ago. However it needs to be emphasised that the presentation of the overall technical result on third party liability insurance does not adequately illustrate the market situation. It needs to be added that only four insurance companies report currently profits on motor third party liability insurance, and three of them earn profits which do not exceed several million PLN. Nineteen insurance companies report loss on motor third party liability insurance.

Non-life insurance market (exclusive of motor insurance)

Key figures:
• The premium for non-life insurance (exclusive of motor insurance) amounted to over PLN 9.9bn and was 10.8% higher than a year ago.
• The premium for insurance against the so-called various financial risks substantially increased. It is the consequence of several factors, including the adjustment of tariffs to the level of risk in insurance guarantees, continued intensive investments in infrastructure and transport, financed by the public sector.

PIU Comment:
Insurance against damage caused by natural forces and the so-called other damage to property is profitable and proves the absence of significant catastrophic events. ‘This year’s damages caused by natural forces did not have a significant effect on the financial standing of insurers. Unfortunately, despite the raising frequency of damages caused by natural forces, the number of the insured remains practically unchanged,’ emphasises Jan Grzegorz Prądzyński, the President of PIU Management Board. The number of policies against the consequences of natural forces increased year-to-year only by 1.7%.

Life insurance market
Key figures:
• Claims and benefits from all life insurances amounted to PLN 17.84bn (a decrease by 4.57%)
• The premium for life insurances decreased by 14.54%, to PLN 23.23bn.
• In Q3 2013 alone, for the first time in 6 years, the premium for class three insurance was greater than the premium earned in class one
• Despite substantial changes in the premium earned in class one (decrease) and class three (increase), the share of those insurances is still the dominant one in the total premium written (84% after Q3 2013 compared with 86% after Q3 2012)

PIU Comment:
The decrease in the market premium is still caused mostly by short-term life insurance policies, i.e. products combining the features of a life insurance policy and a bank deposit. For this class of products, the decrease in premiums was the highest (more than 31%). In terms of benefits paid, the biggest increase is connected with unit-linked insurance. The value of benefits increased by 15.6%.

Net financial result

The net profit of life insurers after Q3 2013 was more than PLN 2.3bn and was 10% lower than a year ago. ‘It is the effect of results on investing activity which deteriorated from the last year,’ explains Jan Grzegorz Prądzyński.
According to the financial statements data, non-life insurance companies closed three quarters with PLN 5.83bn worth of profit. We should clearly state that this result is mainly related to the dividend policy of the largest Polish insurance group.
Both life insurers and non-life insurers reduced the costs of their business activity. After three quarters of 2013, Polish insurers paid PLN 957m of income tax.

The excel table presenting results