According to the Bank of Lithuania, in 2017, the gross written premium of non-life insurance companies was EUR 561 million and increased by 21.2% compared with the previous year.
The market growth rate was largely generated by motor insurance (62.1% of the market) whose sale increased by 29.8%. TPL insurance increased by 38.3% whereas MOD insurance grew by 18.1%. Higher gross written premium in motor insurance is attributable predominantly to increased average premiums in the market.
As at the end of 2017, there were 13 companies operating in the non-life insurance sector (including 9 branches of insurance companies established in other EU member states).
Lietuvos Draudimas continues to be the largest insurance company in Lithuania in terms of total gross written premiums for non-life insurance. The company’s share in the market at the end of 2017 was 31.0%. Considering the recent acquisition transactions, the total shares of top four players in the non-life insurance market was 80.5%.
Gross premiums accumulated by Lithuanian life insurance companies was EUR 231 million in 2017, decrease of 6.2% compared to the previous year. The slowdown of the market growth rate was significantly affected by legislative changes limiting the tax relief to EUR 2 thousand as of the beginning of 2017.
In the life insurance structure, unit-linked insurance represented the largest share at 59.2% of the portfolio value. Traditional life insurance accounted for 19.3% of the premium written.
At the end of 2007, there were 8 companies operating in the life insurance sector. The Lithuanian life insurance market is highly concentrated. At the end of the year, the share of the largest three life insurance players in the total gross written premium was 60.4%.
The Latvian non-life insurance market recorded a gross written premium of EUR 237 million as at the end of Q3 2017. This is nearly EUR 31 million, i.e. 14.8%, more than in the same period of the year before.
The biggest share in the non-life insurance market share, measured in terms of gross written premium, was captured by motor insurance, whose market position was additionally strengthened by a price increase in the market. MOD insurance accounted for 24.2% of the market and TPL for 23.7%. Also health insurance (19.3% market share) and property insurance (18.3% market share) had an important position in the product structure.
In 2017, there were 11 insurance companies operating in the domestic non-life insurance market and 64.9% of the market was in the hands of the biggest 4 insurers.
In 2017, non-life insurance companies operating in Estonia recorded an increase in gross written premium by 11.1%, compared to 8.4% in 2016. Total gross written premium was EUR 336 million, EUR 89.4 million, i.e. 26.6%, of which was accumulated by foreign insurance companies conducting operations in Estonia.
The structure of non-life insurance in 2017 was dominated by motor insurance, which accounted for 61.2%, including MOD insurance accounting for 32.7%. Property insurance gathered 25.5% of the gross premium written in the market.
As at the end of 2017, there were 12 companies operating in the country’s non-life insurance sector (including 4 branches of foreign insurance companies) among which the biggest 4 companies held 70.1% of the market.
Activity of PZU companies in the Baltic states
As of November 2014, the PZU Group has been operating in the Lithuanian non-life insurance market through Lietuvos Draudimas, which, as of May 2015, is the owner of the PZU Estonia branch.
Lietuvos Draudimas is the leader of non-life insurance market in Lithuania holding a market share of 31.0%. In 2017 it recorded a 27.0% increase in gross written premium compared to the year before, reaching EUR 174 million. The biggest increase was recorded in motor insurance (37.1% y/y) in connection with an increase in the insurance rates in the region.
Life insurance operations in Lithuania are conducted through UAB PZU Lietuva Gyvybës Draudimas – “PZU Lithuania Life”. Collected written premium was EUR 14 million, representing an increase by 15.9% compared to the previous year. The highest sales growth was recorded in endowment insurance, which increased by 15.9% compared with 2016. The share of PZU Lithuania Life in the life insurance market was 5.9% (compared with 4.8% in 2016).
In Latvia the PZU Group conducts operations through AAS Balta, which became part of the Group in June 2014, and then (in May 2015) the branch took over the PZU Lithuania branch operating in the Latvian market since 2012. At the end of Q3 2017, the total share of the non-life insurance market reached 27.2% and gross written premium was EUR 65 million (EUR 89 million at the end of 2017).
Since May 2015 the entity conducting operations in Estonia is a branch of Lietuvos Draudimas and was established as a result of merger of two entities – branch of the Lithuanian PZU company registered in 2012 and the Estonian branch acquired in 2014, which conducted operations under the Codan brand. The share in the Estonian non-life insurance market in 2017 was 15.6% (14.5% in 2016). Accumulated gross written premium was EUR 52 million.
The Ukrainian insurance market after the first three quarters of 2017 recorded an increase in gross written premium by 26.4%, reaching hryvnia 31 billion. The premium accumulated in non- life insurance was hryvnia 29 billion, signifying 28.5% growth compared to Q3 2016. This increase is attributable mainly to higher tariffs for mandatory insurance, increase in sums insured resulting from depreciation of the local currency and increase in inflation. Motor insurance (34.4% of the market share) recorded an increase in the premium written by 13.6%, including Green Card insurance by 4.0%. In the corresponding period, life insurance companies collected gross written premium of hryvnia 2 billion, signifying 1.7% growth compared to Q3 2016.
The Ukrainian insurance market is highly fragmented – as at the end of September 2017, there were 296 insurance companies operating in the country (34 of which offered life insurance). Despite the still huge number of insurance companies, the top 100 non-life insurance undertakings acquired 97.7% of gross written premium, while the top 20 life insurance undertakings acquired 99.8% of written premium.
On the Ukrainian market, the PZU Group operates insurance business via two companies: PrJSC IC PZU Ukraine (a non-life insurance company), referred to as “PZU Ukraine”, and PrJSC IC PZU Ukraine Life (a life insurance company), referred to as “PZU Ukraine Life”. In addition, LLC SOS Services Ukraine performs assistance functions.
In 2017, the gross written premium collected by PZU Ukraine was hryvnia 1 288 million, it was 14.9% higher than in the previous year. This increase arose from both the increase in the premium obtained through external entities (banks and travel agencies), as well as through its own distribution channels. Motor insurance played a special role in increasing the written premium – its sales growth rate was 21.8%. In 2016, gross written premium collected by PZU Ukraine Life was hryvnia 300 million, up 25.2% from 2016. This growth was mainly achieved in the bancassurance and broker channel, in particular as a result of sales of endowment policies.
During three quarters of 2017, PZU Ukraine obtained 3.3% (down by 0.4 percentage points compared to the first three quarters of 2016) of the gross written premium on the Ukrainian non-life insurance sector, which gave it fifth place on the market. On the life insurance market, in turn, after three quarters of 2017, PZU Ukraine Life ranked fourth with a market share of 10.4% (up 1.9 percentage points from the previous period).
1 Insurance TOP, Ukrainian insurance quarterly, #4(60)2017
2 Insurance TOP, Ukrainian insurance quarterly, #4(60)2017