STATISTICS: CZECH REPUBLIC, 1Q2015: Stagnation continues, sole trader insurance is growing

17 June 2015 — Vlad BOLDIJAR
The results of the Czech Insurance Association (CAP) member companies for the first quarter of 2015 show an increase of 0.5% in total annual premiums. Market stagnation mainly results from an ongoing decline in life insurance reaching almost 3%. Non-life insurance is still experiencing a mild recovery, namely from 2.3% at the end of 2014 to 2.6%.

The following statement was released by the Czech Insurance Association (CAP).

Premiums written in life insurance went down by CZK 335 million to CZK 11.4 billion compared to the same period last year. Single premium contracts in particular reported a significant decrease, with total annual premiums falling by as much as 18.5%, whereas current premium payment contracts weakened by 1.7%, which is a decline of CZK 191 million. Overall, life insurance market saw an annual drop in the number of life insurance contracts exceeding 269 thousand.

"The sinking volume of premiums written in current premium payment contracts in the first quarter was affected, among other things, by changes in tax deductibility of private life insurance which led to termination of contracts by some clients and withdrawal of funds. It is to be expected that with premiums due throughout the year the negative effect will continue to show in the following quarters", CEO of the Czech Insurance Association Tomas SIKORA comments on the developments.

Non-life insurance kept growing and increased by CZK 484 million compared to the end of 2014. The result was achieved despite the fact that a comparison with the situation in late 2014 reveals a significant loss of growth dynamics in motor third-party liability insurance. In contrast to an overall 4.6% rise in 2014, premiums written in motor third-party liability insurance declined by a mere 0.3% in the first quarter of 2015. First-quarter figures mainly result from ongoing insurance renewals at the beginning of the year which, due to high premium discounts, report considerably lower premiums than contracts concluded gradually in the course of the year. In spite of this, developments in 2015 have not yet proved a rise in motor third-party liability insurance prices occurring in 2014, notwithstanding increased obligations in connection with NCC, DF and FRS (the New Civil Code, the Damage Fund, the Fire Rescue Service).

Collision insurance grew by a promising 4.1% in the first quarter of 2015 (compared to weak growth of as little as 1% in 2014). "A similarly significant shift can also be seen in sole trader insurance where first-quarter results show an increase in premiums written of more than 5 percent," says Tomas SIKORA, but also adds: "A long-term comparison will be needed to determine whether it is a systemic trend change or a single specific event underlying both cases."

NOTE: The figures published by CAP not include the cross-border business via branches or under FOS.

According to the Czech National Bank (ARAD application) - at the end of March 2015, the local insurance market totaled CZK 41.55 billion, as follows: CZK 17.47 billion - life insurance and CZK 24.08 billion - non-life insurance.

Access and download the 1Q2015 Czech Republic insurance market statistics.

Market portfolio (in EUR and CZK) according to the Czech National Bank (CNB) and Czech Insurance Association (CAP):
  • Gross written premiums
  • Growth rates
  • Paid claims
Market rankings in EUR and CZK (GWP/Market shares/Growth rates) according to the Czech Insurance Association (CAP):
  • Overall market ranking
  • Life insurance ranking
  • Non-life insurance ranking
  • MTPL insurance ranking
  • Motor hull insurance ranking