STATISTICS: Czech Insurance Association, 2023: Stable 7% growth, well below the level of inflation

21 February 2024 — Andrei VICTOR
STATISTICS: Czech Insurance Association, 2023: Stable 7% growth, well below the level of inflation

According to the Q4 2023 market data published by the Czech Insurance Association – CAP, total premiums of the members of the association reaches a value of CZK 168.5 billion (~EUR 6.8 billion) by the end of 2023, up by 7.1% y-o-y, or by CZK 11.1 billion.

“Both groups of industries, i.e. life and non-life insurance, still contribute to market growth, however, the strengthening of non-life insurance continues to be more intense”, as the CAP representatives pointed out in a statement.

According to the Czech Statistical Office, the inflation rate for the entire year 2023 reached the level of 10.7%, which is a decrease compared to 2022 (15.1%).

“Therefore, even for the year 2023, with an increase in premiums of only 7.1%, it is still true that the nominal and real growth of premiums diverges significantly and in the long term may not be sufficient to cover growing claims and liabilities, both in vehicle and property insurance ( price escalation of spare parts, construction materials, etc.), as well as within the framework of compensation for a wide range of health consequences”.

The volume of life premiums increased by 3.2% year-on-year and reached CZK 51.37 billion (EUR 2.08 billion), i.e. a value of CZK 1.6 billion higher than a year ago.

On the non-life side, total premiums continue to accelerate. In total, CZK 9.52 billion more were written than last year, and the corresponding premiums amount to CZK 117.1 billion (~EUR 4.7 billion). Year-on-year premiums increased by 8.9% - similar with the YE 2022 status. The development is partially different in the main groups of non-life insurance.

Vehicle insurance remains dominant, accounting for more than 50% of non-life insurance. In motor vehicle liability insurance, the GWP reached almost CZK 30.9 billion, which is 5.2% more than in 2022. MoD segment also accelerated slightly, reaching a current level of 11.7% to the amount of CZK 31.3 billion. The trend is partly supported by the ever-increasing portfolio of insured vehicles - up by 7.8%, surpassing the corresponding 5.8% increase recorded a year earlier. For MTPL line of business, the number of insured vehicles increased slightly, currently reaching +2.3% compared to 1.4% growth in 2022.

In corporate-business insurance, written premiums grew by 7.5%, year-on-year by CZK 1.82 billion and reached CZK 25.97 billion. For comparison, in 2022, this segment was up by 10.4%. The number of contracts did not significantly change year-on-year, although they only increased slightly, namely by 1.4%.

Compared with last year, retail property and liability insurance did relatively well. The value of premiums increased y-o-y by almost CZK 2.04 billion to a value of CZK 17.78 billion. The current growth of 12.9% now surpasses last year's increase of 11.4%.

At the “claims chapter”, according to the CAP statement, in the 4th quarter of 2023, there occurred a total of 14.3 thousand claim files as a result of natural disasters, which include floods, storms, hailstorms and destructive atmospheric precipitation, compared to 7.5 thousand events for the same period in 2022, representing an increase of 90%.

The total volume of these damages amounts to CZK 548 million vs. CZK 240 million incurred in the 4th quarter of 2022, up by 128%.” Compring the figures for the period 2016-2023, the current quarterly, i.e. for the period from 1 October to 31 December, the number and volume of claims was the third highest after 2017 and 2021. However, the total number of insurance events and the amount of related claims for the entire year 2023 is 29% lower year-on-year due to the low total during the first two quarters of 2023”.

Analyzing the development of claims from fires, in the 4th quarter of 2023, there were 1,278 insurance events, which represents a decrease of 4% compared to 1,334 insurance claims from the corresponding period of 2022. “There was also a year-on-year decrease in the volume of these claims from last year's 758 million CZK to the current 640 million CZK, i.e. by 16%. For the entire year 2023, the number of these insurance claims and their volume decreased, specifically in the case of their amount, by 7% from CZK 3.59 billion to CZK 3.35 billion”.