31 July 2012

In the first quarter of this year, non-life insurers paid out to the customers over PLN 3.26 billion, according to the data collected by PIU. The life benefits reached over PLN 5.88 billion.

Motor market

Civil liability insurance (OC) premium amounted to nearly PLN 2.15 billion, whereas accident and theft (AC) premium – to PLN 1.47 billion. OC revenues grew by 12.6% year to year. In the same period the number of the insured increased by 3.6%. This means that last year, the average OC premium grew.
‘It is still related to fuller cover of the aggrieved parties: growing costs of personal damages – treatment, annuities, rehabilitation or redress’, explains Jan Grzegorz Prądzyński, President of PIU Management Board.
Indemnities and gross benefits in Q.1, 2012 amounted to PLN 1.3 billion on account of OC and PLN 922 million on account of AC policies. These amounts are several per cent lower than last year, which is not related to lower indemnities but to a smaller number of damages. In the case of AC, the number of damages dropped to 194 thousand from 227 thousand last year, and in the case of OC – to 279 thousand from 310 thousand last year. The reasons for the lower number of damages are mainly:

• less severe winter, and specifically smaller snowfall,
• more expensive fuel, which has translated into lower traffic intensity and the resulting smaller probability of damage.

It may also be assumed that in Q.1 this year the customers reported minor damages less frequently. This refers mainly to AC insurance. For some time, the insurers have had the possibility to verify the right to discounts declared by their customers. This has made the drivers – capable of ‘keeping the discount or reporting a minor damage’ – select the first possibility as more cost-effective. Verification of the rights to discount is enabled by the database kept by the Insurance Guarantee Fund.

Property market
On the property market (excluding motor insurance) further decrease of premiums has been observed, as related to fire or natural forces insurance, or other property damage. The policies are mainly related to real estate. The insurers collected about PLN 3.27 billion on property insurance, excluding motor insurance, which is over 11% higher than last year.
The available market statistical data do not allow for the presentation of a complete image of the mandatory cultivation insurance. The data published by the insurers offering such products show, however, that Q.1 2012 was exceptional as regards the extent of damages related to that risk.

Life market
On the life market we have observed growth of premium collected on short-term agreements and non-structured products. The so called Class 1, consisting of short-term products beside of the classical life insurance, grew by 33% – to PLN 5.45 billion. One-off abrupt increases and decreases of written premium in that class occur quite often and reflect changes in the customers’ preferences as to short-term agreements.
Written premium in Class III, covering polices combined with insurance capital funds, grew by 13%. At the same time a relatively small group of customers decided to terminate policies with insurance capital funds, which has been confirmed by a small growth (4.9%) of the value of benefits paid out on that account.
Generally, life insurers collected PLN 9.4 billion premiums in Q.1 2012 – over 23% more than in the preceding year. They paid out PLN 5.88 billion benefits, nearly as much as last year.

Technical result and profit
The property insurers ended Q.1 with PLN 565 million in profits – 80% more than a year before. The change can be attributed mainly to the improvement of results by large insurance companies. A small growth of profitability was recorded by life insurers whose profit reached PLN 828 million – 9.2% more than last year.