In Latvia, life insurance accounted for about a quarter of the market until 2022, but it decreased at the end of last year.
However, the industry data for 2023 already demonstrates a more positive picture - savings are slowly recovering and several positive aspects are emerging. Data compiled by LAA show that in 8 months of this year, EUR 70.4 million were generated in life insurance, which is 15% of the entire Latvian insurance market (more than at the end of 1H2023).
The minimum contract term in accumulative life insurance in Latvia to qualify for tax benefits is 10 years. Estimates by LAA members show that over the past three years, the average contract term has increased by about 3 years and ranges from 15 to 18 years. "This is a very important positive aspect", says Janis Abasins, president of the LAA. "Our savings culture is not at a high level, the financial security cushion is thin, so long-term savings, care about older age or a bad day are essential. In Western Europe, life insurance accounts for around 50-60% of the market, so we have something to strive for to feel financially secure and protected. We are on the right track!", he added.
Another interesting and positive aspect is that people start saving earlier, at a younger age. According to the LAA, in 2017 the average age of insureds was almost 43 years, and in 2022 – 38 years. This is a positive trend that would mean an increase in the financial literacy of the new generation, according to the LAA.