After shrinking in the first quarters of 2012, Lithuania's life insurance sector gained momentum and recorded an annual increase of 2.5% towards the end of the year. Last year the entire insurance market grew by 5.2%.The following report was released by the Bank of Lithuania.
"Towards the end of the year the life insurance market usually becomes more active. In 2012, this tendency more than proved itself - a sum of LTL 94.9 million in insurance premiums was signed in December, the largest in the history of the life insurance market," said the Deputy Director of the Prudential Supervision Department of the Bank of Lithuania's Supervision Service, Mindaugas SALCIUS.
The entire insurance market grew by 5.2% - to LTL 1.8 billion (EUR 518 million) in 2012. A contributor to the growth was not only the spurt in life insurance at the end of the year, but the gradual growth of the non-life insurance market as well. It picked up by 6.6% - to LTL 1.2 billion (EUR 352 million); almost 5 million contracts were concluded, 3.7% more than in 2011.
In the non-life insurance portfolio the most significant is still motor third party liability insurance and CASCO motor insurance; their premiums increased, respectively, by 9% - to LTL 425 million (EUR 123 million), and 11.9% - to LTL 286.9 million (EUR 83 million).
In 2012, customers were disbursed LTL 697.7 million (EUR 202 million) in benefits under the non-life insurance contracts - 6.2% less that in 2011, when record-high compensations were paid out for crop insurance. The storm which swept by in the autumn of 2012 did not have a significant influence on property insurance claims either.
The amount of insurance compensations paid out under life insurance contracts last year rose by 15.7% to LTL 390.1 million (EUR 113 million). Insurance compensations, which had risen significantly during the last two years, increased due to growth in the amounts paid out to the survival insurance group.
While investment insurance continues to dominate with its life insurance premium amounts, when entering into new contracts, individuals more often chose traditional insurance products. The number of such contracts grew by a fifth, while 16% less investment life insurance contracts were signed.
Fluctuations in the life insurance market were also influenced by the fact that in 2012 a large portion of insurance contracts drawn up ten years ago expired because tax relief ceased to be effective. Further insurance market developments will also depend on the policyholders' choice of behavior after expiration of their contracts.
"We project that the whole insurance market will grow by approximately 5-6% this year. The volume of the non-life insurance market is expected to grow faster - up to 7%, whereas growth in the life insurance market is expected to decelerate somewhat to 3%," estimated M. SALCIUS.
Access www.xprimm.com and download the FY2012 Lithuanian insurance market statistics.
Market portfolio (in EUR and LTL):
- Gross written premiums
- Paid claims
- Growth rates
- Life insurance ranking
- Non-life insurance ranking
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