Insurance market projected to grow by up to 5% this year
The Bank of Lithuania forecasts that the entire insurance market will see moderate growth in 2021: while the non-life insurance market should rise from the bottom this year, the life insurance market will grow more moderately, compared to 2020.
“The insurance sector has stood up to the challenges posed by the pandemic, although, as we projected, motor vehicle insurance suffered the hardest blow by the quarantine last year. Its premiums declined the most out of all insurance classes. Nonetheless, having assessed economic and other forecasts, we approach this year with cautious optimism. Surely, we will be constantly keeping our finger on the pulse and will be closely monitoring the developments in this market,” said Jekaterina Govina, Director of the Financial Market Supervision Service of the Bank of Lithuania.
The entire insurance market is projected to increase by 3 to 5% this year in terms of premiums written –to €997 million. Last year they totalled €955 million, which is 1% up, compared to 2019, when they constituted €946 million.
Due to the COVID-19 pandemic, in 2020 the non-life insurance market shrank by 1.7%, to €664 million (€675 million in 2019), yet it is projected to rebound this year and pick up by 4 to 6% to nearly €700 million. Motor third party liability compulsory insurance accounts for well over one third of this market. Its portfolio dropped by 8.4% last year, to €242 million. The Bank of Lithuania forecasts its volume to increase by 3.4%, to €250 million. In 2020, the portfolio of property insurance grew by 8.3%, to €130 million, and is projected to increase by 8.3% as well in 2021, to €140 million.
In terms of premiums written, the life assurance market is projected to increase by 1 to 3% in 2021, up to €298 million. In 2020, it grew by 7.5%, to €291 million. Unit-linked life assurance comprises the largest share of the market (65%), with its portfolio rising by as much as 11.3% last year, to €189 million. Current estimations suggest it will continue to expand this year (4.5%), to nearly €200 million. In 2020, health insurance grew by 9.3%, to €37 million. In 2021, its volume is expected to increase by more than 2%, to €38 million.
Detailed statistics of Lithuania’s insurance market for 2020 are available on the Bank of Lithuania website.