Forecast: insurance market development this year is likely to surpass the growth rate of the domestic economy
Driven by a recovery in the economy and an almost 7 per cent increase over 2014, the insurance market this year is likely to maintain a similar growth rate, forecasts the Bank of Lithuania.
“Growth is projected across the insurance market; however, the strong growth in life assurance last year will be somewhat moderate this year, while the non-life insurance sector, in 2014 affected by falls in prices and strong competition, is likely to grow faster,” says Mindaugas Šalčius, Deputy Director of the Prudential Supervision Department of the Supervision Service at the Bank of Lithuania.
The Bank of Lithuania predicts that, if the trends in the development of the domestic economy remain similar, in 2015 the entire insurance market will grow by 7–8 per cent. The economists at the Bank of Lithuania predict the country’s economic development this year to be 3.1 per cent. The life assurance market volumes are likely to expand by 14–15 per cent, while the non-life insurance market — by 4–5 per cent.
The insurance undertakings registered in Lithuania and the branches of insurance undertakings of other EU countries established in Lithuania wrote insurance premiums in the amount of LTL 2,079.4 million (EUR 602.2 million), while the growth in the entire insurance market was 6.9 per cent in 2014.
The amount of written life assurance premiums rose by 18.6 per cent, to LTL 742.5 million (EUR 215 million). The amount of premiums written within the largest life assurance class — unit-linked life assurance — increased by 19.2 per cent, to LTL 523.3 million (EUR 151.6 million). Within this group, particularly strong growth of single insurance premiums was distinguished; their amount boosted by 40.6 per cent — to LTL 31.0 million (EUR 9 million).
Due to particularly strong competition in the non-life insurance market in 2014, the fees on a number of non-life insurance types declined, this being the reason why the insurance volumes within this of class developed at a far slower rate than in life assurance. The amount of premiums written in the non-life insurance sector last year stood at LTL 1,336.9 million (EUR 387.2 million), an increase of 1.3 per cent year on year. The major contribution to moderate growth in non-life insurance volumes stemmed from a decline in transport-related insurance type premiums written. The growth rate of the premiums written within the property insurance class continued to be the highest in the non-life insurance market — 7.8 per cent.