POLAND: Inteliace Research: The Polish insurance market will grow

7 December 2021 —
The insurance market in Poland (GWP) will increase in 2023 to PLN 76.5 billion (~EUR 16.6 billion*). This year the market will grow by 7%, to PLN 67.7 billion (vs PLN 63.4 billion in 2020). The prospects for insurers operating in Poland remain "mostly positive", said the experts from Inteliace Research, Gazeta Ubezpieczeniowa reports.

According to the report, the ratio of GWP to the value of Poland's GDP in 2021 is 2.6% vs 2.7% in 2020, 2.8% in 2019 and 2.9% in 2018. "The insurance market is going well through the pandemic. Volumes are growing. Insurers' profitability has dropped, but it is still relatively high compared to other countries and other sectors in the Polish economy", commented Marcin MAZUREK, an analyst at Inteliace Research.

The report shows that dynamics of GWP increase in 2021 alone will be higher than for 2017-2020 (summed) - both in the case of life and non-life insurance. "The life insurance market has recently changed its trend to a growing one after many years of decline, which is optimistic", noted Marcin MAZUREK.

Life insurance

Inteliace Research forecasts that in 2020-2023 GWP in life insurance will grow on average by 6% annually and will increase to PLN 22 billion in 2021 (from PLN 20.6 billion in 2020) and will reach PLN 24.5 billion in 2023. "The long-term downward trend in life sector apparently ended in 2021 with strong new sales of life risk products to offset the decline in unit-linked insurance", the report said.

Property and personal insurance

Property and other insurance in 2020-2023 will grow on average by 7% annually and compared to PLN 42.7 billion in 2020, in 2021 it will increase to PLN 45.7 billion, in 2022 - to PLN 48.7 billion, and in 2023 - to PLN 52 billion. The ratio of GWP to Poland's GDP will remain stable and will amount to 1.8%.

"After several years of slower premium growth in non-life insurance, an acceleration in premium growth is expected in 2021-2023. The progressive consolidation on the market and exit of some cheap suppliers, such as AXA, will contribute to stabilization of insurance tariffs", the analysts say.

The aggregated data for life insurance and other insurance shows, according to Inteliace Research's expectations, that the Polish insurance market in 2022 will reach PLN 71.9 billion, and in 2023 - PLN 76.5 billion. "The prospects for the insurance sector are very good, especially in property insurance. Inflation is not a problem in non-life insurance, because the value of property for insurance purposes is rising, and therefore premium amounts are also rising", stressed Marcin MAZUREK.

The report indicates that the three largest insurance groups operating on the Polish market - PZU, Talanx, Ergo - had 59% market share at the end of 1H2021, with a total value of PLN 20.5 billion in GWP. Of this, PLN 12.2 billion went to the PZU group (35.4% of the Polish market at the end of H1 2021), PLN 4.4 billion to Talanx (12.7%), and PLN 3.9 billion to Ergo (11.3%). "Consolidating the market around a few of the largest groups and exit of some low-cost suppliers are likely to prevent further tariff erosion and help stabilize revenues in the future", the analysts wrote.

Health insurance

The study also shows that in health insurance the number of policies concluded in 2021 will increase from 3.3 million to 3.7 million, and their value - from PLN 0.94 billion to PLN 1.1 billion. "The public health system in Poland is highly ineffective and its costs are rising faster than premiums. As a result, more and more patients are forced to co-finance health services in order to be able to receive adequate treatment", the reports stated.

"Despite the huge potential, health insurance market is still at a very early stage of development, mainly due to the lack of appropriate regulations that could allow public health institutions to absorb additional private funding", the study noted.

The region's leader despite the decline

The analysts emphasized that the Polish insurance market remains the largest in the CEE among 14 countries - in 2020 it decreased to EUR 14.3 billion, compared to EUR 6.4 billion for the Czech Republic and EUR 3.4 billion for Hungary.

The study also indicates that in Poland the insurance premium penetration rate is EUR 377 per person, compared to the average of EUR 329 for CEE, which corresponds to 2.7% of GDP, with the average for the region being 2.5%. The report covers 14 countries of Central and Eastern Europe (CEE): Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Romania, Bulgaria, and Albania.

*~1 EUR = 4.60 PLN