STATISTICS: CEE, FY2015: 1.5% growth of the overall insurance market's volume, mainly driven by the increasing domestic demand

26 May 2016 — Daniela GHETU
Central and East European (CEE) economies saw, in general, a good 2015, with an average regional increase in GWP of over 3% supported by a solid domestic demand. Some of this economic revival also translated into a revival trend of the insurance business in the region, although not yet generalized and not yet very strong. As a the economic growth patterns are quite different, the extent to which they have resulted in an increased purchasing power of the population and of the local businesses is also different and thus, the growth opportunities offered to insurers are uneven across the region. However, with some exceptions, the CEE insurance markets have seen, at least in GWP terms, positive results.

The consolidated CEE figures for 2015 show an increase in GWP of about 1.5%, affected to a certain extent by the conversion to the European currency. Overall, the regional picture didn't change much. Poland remained the main player in the region, not only on size, but also in sophistication terms. However, given the slightly negative trend recorded by the Polish market, it has lost some 0.6pp of its regional weight, accounting currently for 39.85% of the CEE GWP. The following positions belong to the Czech Republic (17.59%) and Hungary (8.43%), followed by the Slovak Republic, Slovenia and Romania with quite similar market shares, of 6.1% - 6.26%. Top 10 is completed by Croatia and Bulgaria, Serbia and Lithuania. It is interesting to observe that the insurance ranking does not always reflect the countries' size in macroeconomic and population terms, being rather strongly influenced by the per capita average income indicator, especially it what life insurance is concerned.

Life insurance accounts for about 41% of the CEE insurance business because its high relevance in the Top 5 markets of the region. Otherwise, in most countries, especially in the less developed markets of the extra-EU countries, this line accounts for about 20% or less of the premiums portfolio. Bulgaria and Romania, the region's EU countries with the lowest net financial wealth of the household are the most relevant examples for the significant influence that this indicator may have on the life insurance segment's development. Thus, both countries have a share of the life insurance in the market portfolio of only some 20%.

Motor insurance is the second largest business segment in the CEE insurance business. Overall, motor insurance classes account for almost 30% of the region's GWP portfolio.

2015 was a rather good year for the CEE motor insurance. Increasing cars sales, although still very far from the pre-crisis volumes, have brought an aggregated plus of over 1.1 million new passenger cars and light commercial vehicles in the CEE's regional fleet. Still, many of the region's countries are confronted with an ongoing ageing process of their national fleets, which puts an additional stress both on the financial balance of the segment and on the competitive character of the market. It is therefore noticeable the GWP increase recorded on the Motor Hull line in many countries, although in many cases it was accompanied by an increase also in claims paid.

On the MTPL side, the benefits of the increasing cars sales were more visible, as well as the effects of the raising tariffs performed in some of the region's countries. However, Hungary is the only big CEE market which saw last year GWP for motor insurance going up at a double digit pace, of almost 14%; the increase recorded in cars sales and a significant decrease in the number of the uninsured cars led to a significant rise in the MTPL premiums volume, of 18%, while on the Motor Hull side the GWP growth was of about 8.7%. Bulgaria and Romania are also worth mentioning, with motor insurance GWP growth rates in the vicinity of the 10% threshold.

Property insurance
performed well in most CEE countries, although in most of them the insurance gap in this area remains significant, mostly in what the nat cat risks are concerned. Poland may praise its 80% household insurance coverage degree, while Hungary and the Czech Republic also have an over 50% insurance coverage of the houses. Yet, In Romania the same indicator only reaches 18%, despite implementing a mandatory nat cat insurance scheme. Overall, following a year relatively calm in extreme weather events terms, the property insurance line seems to be one of the most profitable in the region.

Comprehensive 2015 statistical data for the CEE insurance markets are available in the latest issue of the XPRIMM Insurance Report CEE, SEE & CIS.

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