Slovakia Insurance Report Q3 2010 |  | Author: Business Monitor International
Publisher: MarketResearch.com
Category: Book
Buy New: $530.00
as of 9/9/2010 12:23 CDT details
Seller: Amazon.com
Format: Download: PDF
Media: Digital
Pages: 74
ASIN: B003WHX19U
Publication Date: June 1, 2010
Availability: Available for download now
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Product Description
Writing in April 2010, we have been able to ensure that the report includes actual data for 2008. We have generally been able to use data published in 2009 to adjust our figures for the year as a whole. We estimate total premiums in 2009 of EUR2,122mn. This comprises non-life premiums of EUR1,010mn and life premiums of EUR1,112mn. In 2014 the corresponding figures are forecast to be EUR3,243mn, EUR1,575mn and EUR1,669mn. In terms of the key drivers that underpin our forecasts, we forecast that non-life penetration will rise from 1.56% of GDP in 2009 to 1.90% in 2014, and that life density will rise from US$290 to US$391. BMI’s Insurance Business Environment Rating for Slovakia is 59.2 out of 100. We include a discussion of developments in regional markets on the basis of results published by major cross-border companies in relation to Q209 or Q309 and the latest information provided by regulators and/or trade associations. In local currency terms, non-life premiums shrank marginally for Slovaki,a in a similar fashion to Croatia and Hungary.
Slovakia’s Insurance Sector In Q210
In January 2010 the latest figures from the National Bank of Slovakia (NBS) and the insurance trade association, the Slovak Insurance Association (SLASPO) pertained to H109. Although absolute premium figures from the two sources differ slightly, the trends are consistent. According to the NBS, total life premiums in H109 were EUR505.8mn, or 7% lower than in H108. Meanwhile, non-life premium fell by 3% to EUR524.5mn. In both segments, the numbers of insurance contracts outstanding was higher at the end of June 2009 than it had been a year previously. Given the generally dismal economic environment and the volatility in financial markets following the global financial crisis this is a positive outcome; however, it suggests that most of the Slovak insurance sector faced downwards pricing pressure.
In the life segment, the total number of life policies outstanding rose from 8.570mn at the end of June 2008 to 8.925mn at the end of June 2009. The number of traditional life assurance policies dropped from 2.693mn to 2.380mn. However, the number of unit-linked policies rose from 600,522 to 702,317, and the number of supplementary policies increased from 4.588mn to 5.106mn. In short, it was the broadening of the client base of these two lines that underpinned the resilience (by the standards of the rest of Central and Eastern Europe) in life premiums.
In the non-life segment, the total number of policies rose from 6.687mn at the end of June 2008 to 7.175mn at the end of June 2009. The number of liability insurance policies fell from 1.135mn to 1.124mn, but numbers rose for virtually all other classes. Most noteworthy, though, were trends in the motor insurance lines. Compulsory motor third party liability (CMTPL) premiums fell 12% to EUR166mn, even as the number of policies rose by 11% to 2.075mn. The number of CASCO policies increased by 38% to just over 752,200. However, CASCO premiums fell 2.5% to EUR150mn. Fire insurance stood out as a line where the number of policies remained more or less unchanged, but where premiums actually rose by 8% to EUR126mn.
Few of the major cross-border insurance companies actually commented on their operations in Slovakia. However, Vienna Insurance Group, whose companies (Kooperativa, Komunálna and Kontinuita) accounted for nearly 30% of the non-life segment and a marginally smaller portion of the life segment in H109, according to SLASPO, noted in its report for the first three quarters of 2009 that it had achieved double digit-growth in life premiums in Slovakia (among other countries). This indicates that these companies have been gaining ground in Slovakia. We suspect the gains were at the expense of at least one of Allianz, ALICO or Generali/PPF, whose subsidiaries in Slovakia were the next three largest players in the life segment, with respective shares of 24%, 12% and 9%. The non-life segment is also fairly concentrated. The Vienna Insurance Group companies combined are Slovakia’s second largest non-life group. The subsidiaries of Allianz and Generali/PPF are the largest and the third largest players in that segment, with market shares of 39% and 11% respectively.
Issues To Watch
Pricing In The Motor Insurance Segments
In spite of the structure of the non-life market, it appears that the main players do not have pricing power. If prices fail to stabilise and the number of policies stops growing, premiums for CMTPL and CASCO could slide.
Policy Numbers For Unit-Linked And Supplementary Life Products
As noted above, the growth in the number of policies in these lines has underpinned the stability of the life segment. Should the number of policies being issued stabilise or fall, the market will weaken. Investment Earnings
Some of the insurance companies may find it difficult to maintain investment earnings in 2010, especially if volatility in other regional bond markets affects that of Slovakia. Fortunately, most of the major insurers are subsidiaries of very large multinational groups.
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