Insurance market: rapid life-assurance growth, moderate non-life insurance expansion and record-high profits
Over the three quarters of this year, the insurance market, in terms of premiums written, increased by 6.3 per cent and amounted to almost LTL 1.5 billion. Such growth was driven by rapid expansion of the life assurance sector. The non-life insurance sector was distinguished by high competition and more modest growth.
“The double-digit growth momentum gained by the life assurance market this year retains a rapid growth rate, non-life insurance continues to grow, while in both insurance classes new records are hit,” says Mindaugas Šalčius, Deputy Director of the Prudential Supervision Department at the Supervision Service of the Bank of Lithuania.
In the first three quarters of 2014, the life assurance undertakings registered in Lithuania and branches of life assurance undertakings of other European Union Member States established in Lithuania wrote insurance premiums that amounted to LTL 489.2 million, i.e. 16.9 per cent more than in the same period last year. The amount of premiums written within the largest life assurance class — unit-linked life assurance — increased by 15.9 per cent (to LTL 332.2 million), but the in the area of unit-linked life assurance, the amount of single premiums jumped by 51 per cent — to LTL 64 million. According to M. Šalčius, such growth shows that with the low-interest rate environment, insurers look for investment alternatives and tolerate risk more.
In the non-life insurance sector, expansion was more moderate: premiums written increased by 1.8 per cent and exceeded LTL 1 billion. The changes in this market were driven by intense competitiveness — the fees on a number of non-life insurance types decreased, this being the reason why the volume of the non-life insurance group increased slower.
Nevertheless, the expansion of the insurance market, although slightly slower than in previous periods, broke new records. For example, in the largest group of the non-life insurance class — motor third party liability insurance — the amount of premiums written in January–September 2014 increased by 0.8 per cent, reaching LTL 360.5 million and was the largest over the history of Lithuania’s insurance market. The volume of health insurance was also at a record high in the same period — LTL 94.8 million. In the life-assurance class, a record-high was reached by the amount of premiums written in the case of survival — LTL 118.4 million.
The insurance undertakings registered in Lithuania earned LTL 84.9 million in profits in the three quarters of 2014. This is the best January–September result over the past ten years.
For the detailed Review (457.3 KB )of Lithuania’s insurance market for the third quarter of 2014, financial statements and investment reports go to the website of the Bank of Lithuania.