2012-02-07
Last year was a successful one to the insurance market as its growth rate almost doubled compared with the national economy. In 2011, the amount of written premiums reached as high as LTL 1.7 billion, a year-on-year rise of 9.5%. And the number of insurance contracts surged in 2011 by 3.3% to LTL 4.9 million. The premium amount paid out last year by domestic insurers saw an increase of 15.5% compared with the year before last year.
“Non-life insurance which traditionally lags somewhat behind the economic cycle took over the locomotive role of the life-insurance market, as the growth of the latter was contained by concerns which intensified in global financial markets in the second half of the year,” Mindaugas Šalčius, director deputy of the Prudential Supervision Department under the Supervision Service of the Bank of Lithuania said.
The amount of non-life insurance premiums written in 2011 made up LTL 1.1 billion, an increase of 12.5% compared with 2010. The number of contracts grew by 3.5% to LTL 4.8 million.
Types of insurance associated with the risk of transportation were the major drivers behind the growth of non-life insurance. As the number of motor cars increased, written premiums of motor third party liability insurance climbed by nearly LTL 28.4 million (8%) with their gross amount reaching LTL 400 million and the number of contracts having growing during the year by 140.6 thousand or 6% to LTL 2.47. After a drop in 2010, the amount of written premiums of CASCO insurance climbed by almost LTL 33.0 million (15%) to LTL 256.3 million.
Property insurance has become popular in 2011. The amount of premiums of this type insurance grew during the year by nearly LTL 34.4 million (17%) to more than LTL 243 million. The increase was driven largely by farmers and agricultural companies which decided to buy insurance for their crops. Consequently, premiums for crops insurance jumped by 6 times to LTL 32.4 million, and the insured area under crops was threefold higher than in previous year.
The amount of non-life insurance benefits paid out to customers of insurance companies in 2011 for damages incurred made up LTL 743.5 million, a 1.9% hike compared with 2010.
In 2011, the growth rate of life-insurance market was three time lower than the growth rate of non-insurance market. The amount of life-insurance premiums written during the year went up by LTL 21.2 million (3.9%) to LTL 560.8 million.
The life-insurance results have been affected by lower one-time life-insurance premiums during the last months of the year, when population seized an opportunity of additional investments of free funds after they had sensed the benefits of tax reliefs.
The amount of premiums of investment-oriented life insurance, the dominant component of life-insurance, grew during the year by LTL 12.7 million (3.3%) to LTL 396 million.
There were 56.1 thousand of life-insurance contracts concluded in 2011, a drop of 16.6% compared with 2010, driven mainly by a one-third decrease in contracts for insurance against death.
Last year, life-insurance customers were paid LTL 337.3 million in benefits, an increase of 63.9% compared with the previous year.
The Bank of Lithuania expects the insurance market to grow further this year.
„We expect the general insurance market to grow this year by approximately 5%, but at a decelerated rate. This will contribute to the increase in the demand for non-life insurance products. Extreme climate conditions may contribute to this too, as they motivate people to ensure property. Expectations and the development of financial markets may freshen up the life-insurance market. Moreover, we cannot rule out that people are to invest or have already invested the insurance compensations they received for the deposits held with a bankrupt SNORAS bank,” Šalčius added.