STATISTICS: Czech Rep., CAP: Insurers' business increased by 4.4% y-o-y during 2021 mainly due to non-life

9 February 2022 —
STATISTICS: Czech Rep., CAP: Insurers' business increased by 4.4% y-o-y during 2021 mainly due to non-life

According to the year-end figures published by CAP (Czech Insurance Association), at the end of 2021, total GWP from the members of the association totaled CZK 147 billion (~EUR 5.92 billion), 4.4% more y-o-y or by CZK 6.1 billion.

Compared to 3.6% growth rate recorded last year, "2021 confirmed that the local insurance market in increasing path. Both segments, i.e. life and non-life insurance contributed to the market growth, however, the strengthening of non-life insurance is currently more intense", as the CAP representatives mentioned in a statement .

Premiums written in life insurance rose by 1.5% y-o-y to CZK 48.24 billion (EUR 1.94 billion), i.e., CZK 691 million more than a year ago, when this market segment strengthened by a more significant 3.1%. 

The life-regular policies, which represent more than 90% of the number of all life insurance contracts posted a 1.7% increase in premiums vs. 3.7% a year before. 

At the same time, the GWP volume of one-off premiums (single payment) is currently declining year-on-year, namely by 8.8%. "However, its development fluctuates considerably and has only a marginal impact on the overall result".

In terms of number of contracts, it continued to decline. There are 2.4% fewer y-o-y, which corresponds to a decrease of over 119 thousand. Thus, at the end of 2021, there were active about 4,917,000 contracts. 

It is worth to mention that the number of newly concluded life insurance contracts decreased only slightly by 0.8% y-o-y to CZK 13.09 billion. In case of "one-off" contracts, the value of premiums decreased by CZK 444 million to CZK 7.57 billion, while the regular policies increased by CZK 320 million to CZK 5.52 billion. "The number new contracts in 2020 and 2021 was affected by COVID-19 pandemic, when the number of negotiated contracts dropped sharply during Q2 2020, which was subsequently offset by higher production in the following quarter. Then, during 2021, the number of contracts stabilized and, for example, in Q3 it even surpassed the pre-pandemic year 2019. However, during the last quarter of 2021, the new business related to life segment significantly decreased, even by 10% compared to 2020, when there has already been a y-o-y decrease of 23%. In total, the number of new life insurance contracts decreased slightly by 3.3 thousand year-on-year. For the whole year, almost 433 thousand of them were closed, of which almost 422 thousand were with regular payment". 

For the non-life segment, the total business-volume increased by CZK 5.45 billion to CZK 98.80 billion (EUR 3.97 billion). In percentage points, this is 5.8% more year-on-year growth rate, which also exceeds 3.9% growth reported in 2020. 

Motor insurance, which has a share of more than 50% in non-life, continues to be dominant. In MTPL, the GWP reached almost CZK 28.2 billion, which is 5% more than in 2020. However, the growth rate decreased by 2.1 pp, as it increased by 7.1% last year. In case of MoD, the balanced development was confirmed again, when the dynamics remained at a similar value, comparable with the previous quarter, i.e., at 6.7%, - GWP of CZK 25.6 billion. "This trend is partly supported by the increasing portfolio of insured vehicles, whose total number is currently rising by 2.3%, which now slightly exceeds the corresponding increase posted a year earlier".

In case of corporate products (industry & business), the value of GWP grew by 3.4% (or by CZK 711 million) to CZK 21.9 billion. "For comparison, in 2020 this sector strengthened by 4.7%. The number of contracts did not change significantly year-on-year. There was a slight increase, namely by 1.4%".

For the other retail property & liability line of business, premiums written increased by almost CZK 1.14 billion year on year to CZK 14.13 billion. "The current year-on-year growth of 8.8% significantly exceeded last year's increase of 5.5%".

In other non-life subclasses, apart from motor, property and civil liability insurance, - which also covers medical expenses and other risks of travel insurance - there was a significant decline of about 12% in 2020. In 2021, there is a partial correction, which is expressed by a 7.7% growth-rate, due to the low comparison base of 2020.

At "the claims chapter", total payments in property insurance - due to risks as floods, storms, hail, precipitation, snow - reached CZK 6.45 billion (EUR 260 million) in 2021 representing a 117% y-o-y increase vs. 2020 (2.97 billion). "This is the highest amount for this segment since 2013, when the last large-scale floods occurred in a large part of the Czech Republic".

The large increase in 2021 NatCat claims occurred in connection with the tornado in South Moravia - in the segment of claims as a result of storms, hail and atmospheric precipitation - where the volume of insured damage for the whole of 2021 reached CZK 5.77 billion vs. CZK 2.17 billion in 2020, representing an increase of 165%. "This is a record value in this group of risks since the beginning of the entire time series in 2006", affirmed the CAP representatives.

In case of claim files related to real-estate fires remained stable, totaling 1,242. It is worth mention that during the first two quarters of the year, the volume of payments related to this risk amounted between CZK 400 and 600 million." A completely different result occurred in the two quarters of the second half of 2021, when the volume of insurance claims from fires almost doubled, in both periods exceeding CZK 1 billion. As a result, the average claim on this segment increased in the second half of 2021 from a long-term stable value of CZK 367 thousand to CZK 860 thousand".

Access and download the FY2021 Czech insurance market statistics.