After leaping in the first half-year, insurance sector will continue growing fast
In the first half-year, Lithuania’s insurance market growth was the strongest over the decade: insurance premiums rose by 17.4 per cent (to EUR 388 million), claims paid – by 18.1 per cent (to EUR 214 million). In view of the current situation and trends, the Bank of Lithuania is improving insurance market development projections.
‘This strong market growth was basically due to growth in the non-life insurance market of more than one-fifth. According to our calculations, this year it has a potential to grow by some 15 per cent, while the entire insurance market will grow by a tenth,’ Vytautas Valvonis, Director of the Supervision Service of the Bank of Lithuania, says. Early in the year, the forecast was that the entire insurance market would grow by 6-7 per cent and the non-life insurance market – by 10-12 per cent.
Non-life insurance market volumes stood at EUR 278.0 million, claims paid – at EUR 143 million in the first half-year of 2017, an increase of 13.6 per cent year on year. The pace of growth in the life assurance market was less robust: it grew by 9.6 per cent, to EUR 109.7 million; however, EUR 70.6 million has been paid out under life assurance contracts, which is a year-on-year increase of almost 30 per cent.
Within non-life insurance, in the first half of this year, motor third-party liability insurance volumes increased the most: premiums rose by a third – to EUR 104 million, claims paid – by a fourth, to EUR 60 million. A significant contribution to the amount of premiums and claims paid stemmed not only from an increase in the number of car accidents but also a rise in the average insurance claim paid.
As increasingly more endowment assurance contracts, entered into 15 years ago, expire, amounts payable out upon expiry of an insurance contract rose significantly – by 37 per cent, to EUR 23.2 million.
In the first half-year, all the five life assurance and two non-life insurance undertakings registered in Lithuania, as well as 82 insurance brokers out of 96 operated profitably. The profit earned by insurance undertakings before tax amounted to EUR 12.6 million, of which EUR 11.6 million was earned by life assurance undertakings. Non-life insurance undertakings earned EUR 1 million in profits. Insurance brokerage firms earned EUR 3.3 million in profits.
At the end of June 2017, assets managed by insurance undertakings amounted to EUR 1.45 billion (an increase of almost EUR 227 million, or 18.6% from the middle of last year). Most of the assets are comprised of equity investment, of which 65 per cent (EUR 480 million) has been invested in government securities. The assets of insurance brokerage firms stood at EUR 27 million at the end of June of this year, an increase of 17 per cent over the year.
All insurance undertakings were solvent, i.e. held sufficient eligible own funds to cover the capital and minimum capital requirements. The solvency ratio of life assurance undertakings was 2.48, of non-life insurance undertakings – 1.44 (the required minimum is 1).
In the first half of 2017, 20 insurers provided insurance services, of which 9 undertakings and 11 branches of undertakings registered in other EU countries. 96 insurance brokerage firms mediated insurers in the conclusion of insurance contracts.