The results of the insurance market after Quarter 1 2013.

Polish insurers paid PLN 9.87bn worth of claims and payments in Q1 2013 to clients and the injured. This is 7.3 per cent more than last year.

Key figures:
• third party liability insurance – 269 thousand claims and benefits paid to the overall amount of PLN 1.36bn.
• comprehensive insurance – 180 thousand claims paid to the overall amount of nearly PLN 0.9bn
• the gross written premium in third party liability insurance was PLN 2bn (a drop by 4.58 per cent)
• the gross written premium in comprehensive insurance was PLN 1.36bn (a drop by 7.7 per cent)

PIU Comment:
A tendency can be seen on the third party liability insurance market to an increasing average payment and a decreasing number of damage occurrences. Consequently, the insurers’ burdens under the third party liability insurance are on the increase despite the diminishing number of collisions and accidents reported. In the case of comprehensive insurance, the number of damage incidents has gone down, and so has the value of claims paid, but the number of damage occurrences has dropped to a greater extent than the amounts paid.
The technical result on comprehensive insurance was PLN 120bn after Q1 2013 and it was 2% better than a year ago The technical result on third party liability insurance was PLN 59.5M, compared to PLN 22.4M a year ago. ‘We finished the first quarter of 2012 with a positive technical result for third party liability insurance as well, but after 12 months, the market recorded a loss of PLN 427M. Today, it is hard to anticipate the situation after 2013, but the third party liability market is certainly still deeply imbalanced, mostly due to the unpredictability of the personal damage,’ says Jan Grzegorz Prądzyński, PIU President.

Property insurance market (exclusive of motor insurances)

Key figures:
• the number of insurances against damage caused by natural disasters dropped compared to Q1 of 2012 by 2.6%, to the amount of 7.68M, but it is largely triggered by a reduced number of mandatory insurance of agricultural buildings (decreasing number of farms)

PIU Comment:
The first quarter of 2013 (unlike the corresponding period of 2012) brought no substantial damage related to the insurance of crops. Also, no significant damage was recorded in connection with industrial or transportation damage. ‘It seems that the data for quarters 2 and 3 are going to be of key importance for the results from the property market this year, as this will be the time which will show the impact of natural disasters this year on the results accomplished by the insurers. So far, there are no indications of extraordinary costs, and let us hope that the situation will remain unchanged in the subsequent months,’ says Jan Grzegorz Prądzyński.

Life insurance market

Key figures:
• Claims and benefits from all life insurances amounted to PLN 6.5bn (an increase by 10.8%)
• Payments from unit-linked products increased by 30% and reached PLN 1.9bn

PIU Comment:
The premium on the life insurance market was PLN 8bn after Q1 2013, which marks a drop of 14.5%. This was affected by short-term life insurance policies, i.e. products combing the features of a life insurance policy and a bank deposit. This is the group of products for which the decrease in premiums was the highest. In the other product groups, the sum total of collected premiums changed insignificantly. The value of payments made increased compared to last year. In total, out of more than a million payments made, the clients and eligible parties received PLN 6.5bn, over 10% more than a year ago. The value of claims and payments was mostly related to unit-linked insurance: the clients were paid PLN 1.9bn compared to PLN 1.45bn a year ago.

Net financial result
The net profit of life insurers for the first quarter exceeded PLN 616M and was 25% lower than a year ago. ‘It almost entirely results from the results on investing activity deteriorated in comparison with last year. Our premiums did not considerably affect the profits of life insurance companies, as it applied to low-margin products,’ explains Jan Grzegorz Prądzyński.
Better results were recorded by property insurers, who closed the quarter with the profit of PLN 752M, i.e. nearly 35% higher than last year. With respect to the technical result, a significant improvement was seen in group 9, i.e. other property damage (positive result of PLN 128M versus a loss of PLN 159M a year ago).
Both life insurers and property insurers reduced the costs of their business activity. In the first quarter of 2013, they paid nearly PLN 314M in the form of income tax.

Table of results