STATISTICS: CZECH REP., FY2018: 4% market growth driven by the motor insurance lines

21 February 2019 — Daniela GHETU
STATISTICS: CZECH REP., FY2018: 4% market growth driven by the motor insurance lines
Czech insurers ended 2018 with a 4.1% y-o-y increase in GWP, to EUR 5.03 billion. Most of the market growth was owed to the higher growth rates seen on the motor insurance lines, data provided by CAP - the Czech Insurance Association show.

The market results denominated in local currency show a slightly higher market growth rate was, of 4.8%.

Life insurance saw an apparently stagnant evolution, overall increasing at a very low pace in local currency, of less than 0.6%, which calculated in euro, translates into a slightly negative trend (-0.17%). Yet, at a closer look, this outcome represents the sum of two opposite trends. Thus, while the single premiums life insurance segments continued its descending trend, with premiums written for the whole of 2018 reaching 18% lower than in 2017, the other lines have recorded a positive evolution which almost succeeded to offset the lost business volume.

However, according to a CAP statement, the number of active insurance contracts is still decreasing (compared to 2017, their number is 89 thousand units lower), amounting at the end of 2019 to 5.29 million units. The decreased is not so much due to a significant change in the number of newly concluded life insurance contracts, but to premature termination of older contracts. It is worth mentioning though that compared with the past years, when Czech life insurers were confronted with a wave of policy surrenders (about 1 million contracts were prematurely closed both in 2011 and 2012), the number of policies lapsed decreased to about half million in 2018. "Compared to 2017, the number of new business deals fell by 1%, while the number of contracts terminated further decreased by 9%," said Jaroslav Urban, insurance analyst within CAP.

Non-life insurance GWP amounted to EUR 3.32 billion, up by 6.4% y-o-y (7.2% in local currency). Motor insurance lines saw the highest growth rates, providing for most of the extra premiums volume. The MTPL GWP increased by 6.8%, exceeding the 3.9% growth seen in the number of contracts. According to CAP, the average loss in this sector is growing at a faster pace (around 7%) than the average premiums (3%).

It is also worth noting that the group of insurance lines newly monitored by CAP - retail property and liability insurance - reached, in 2018, saw a 4.85% increase in premiums (5.7% in local currency) against 2017. On the other hand, Czech insurers had to pay last year a significant volume of claims for water damage, reaching to about EUR 45 million (2.7% up y-o-y). The average amount of one insured event occurring in the context of water damage (caused, for example, by a ruptured tubing at the sink supply, toilet flushing, or damage caused by the heating of neighbors, damage to its own flat, its facilities, etc.) amounts to CZK 25,527 (EUR 992), which, compared to the average amount of such premium the 2017 event in the amount of CZK 23,009 represents an increase of even 10.9%.

CESKA pojistovna, KOOPERATIVA and ALLIANZ have made the market Top 3, controlling together a little more than the half of the market GWP (50.7%).

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