Mr Władysław Kosiniak-Kamysz, the Polish Minister of Labour and Social Policy, sent to Grzegorz Prądzyński, the President of the Board of PIU a letter in which he emphasizes the role of the PIU congress as an excellent place of debate on the problems and the importance of insurance in the modern-day world.
An increasing interest in the private medical care in Poland is becoming more and more visible. The number of medical policy holders amounted to 1.2 million in 2014, compared to 850 thousand the year before. The clients paid for the medical insurance PLN 400.9 million, i.e. 19% more than in 2013. The most popular are still group insurance packages, however, there has been a significant increase in the number of individual clients.
Last year was noted one of the greatest increases, in comparison with the previous years, in the number of individuals who bought medical policies. 1.2 million people held a private insurance, which means a 42% increase. The gross written premium increased by 19% in 2014 and amounted to PLN 400.9 million – The public system of medical care is inefficient, hence there is a growing interest in the private medical care, both on the part of the clients and insurance companies –says Mr. Jan Grzegorz Prądzyński, President of the Polish Insurance Association.
There are more and more offers in the market which vary with regards to the scope of their insurance coverage. The performance results for 2014 indicate that Poles are more frequently inclined to buy an individual insurance policy with medical coverage, provided its price is tailored to their budget, and at the same time its scope meets their needs. Last year was noted an increase over 10% in the value of the premium in the group of individual medical insurances. On the other hand, the number of persons who decided to buy an individual insurance amounted to the record 173.7 thousand, i.e. almost five times more than the year before.
– We experienced the comfort offered by private medical insurance and we appreciated its value. Hence, there is an increase in the number of individual clients. Due to a greater interest in them, there are also more offers from insurance companies. The array of offers allows the less wealthy clients to be able to afford a policy, too
–says Mrs. Dorota M. Fal, Health Insurance Consultant to the Management Board of Polish Insurance Association. – It is still only a small step towards serious changes in this area. Without new legislative solutions, which allow people a broad access to the medical insurance, the potential of the market will remain limited –she adds.
When analysing the performance results of the market, a continuous good standing of the group medical insurance sector can be observed, i.e. those acquired most frequently by employers for employees. The number of persons who had such insurance increased by 27%, amounting to 1.03 million in 2014. The premium increased by 21%, reaching PLN 332 million.
Eight insurance companies signed an agreement today pursuant to which they will offer Direct Claims Adjustment (DCA) to their clients. The service shall start on 1 April 2015 and shall be preceded by a month’s pilot programme. Clients shall benefit from implementation of DCA as insurers shall be competing with each other in third party liability claims adjustment quality.
Direct Claims Adjustment is a system enabling car repair or regaining compensation from one’s third party liability insurer and not, as hitherto, from the claim perpetrator’s insurer. DCA has been used in Europe for several dozen years, among others, in France, Belgium, Spain or Italy. The following insurers shall join DCA system developed by the Polish Insurance Chamber: Concordia Ubezpieczenia, Ergo Hestia, PZU, UNIQA, Warta (from 1 April 2015), Aviva, Liberty Ubezpieczenia (from 1 July 2015) and Gothaer (from 15 October 2015). Collectively, the abovementioned insurers represent 68% of third party liability market measured with the collected premium.
– Direct Claims Adjustment has been the most important project in the Polish insurance market in recent years. Due to several months’ work of company representatives united at the Polish Insurance Chamber we have developed a solution which enables the claimants to adjust their claims with their insurer. That is why many clients shall start to pay more attention to the quality of services offered, said Jan Grzegorz Prądzyński, CEO of Polish Insurance Chamber.
In practice, the claimant’s insurer will deal with determining the claim amount and the compensation payment. After the payment of the compensation, already without the engagement of the client, the claim shall be settled between the claimant’s insurance company and the perpetrator’s insurance company. What is significant for drivers, DCA system shall not cause increase nor decrease of prices.
– After two months of intensive work, I am proud to admit that DCA shall be available for the majority of Polish drivers. Finally, insurance companies offering third party motor liability insurance will be able to compete for clients with quality of services and not only the price, said Rafał Stankiewicz, Chairman of Claims Adjustment Commission at the Polish Insurance Chamber.
Direct Claims Adjustment shall refer to the prevailing majority of communication accidents which will occur on the Polish roads. In each country where DCA was implemented some claims were initially excluded from the system. That shall be the case in Poland as well. DCA shall not apply to, e.g.:
• personal claims
• claims which occur outside Poland
• claims the value of which exceeds PLN 30 thousand
It should be underlined that claims not qualifying to DCA constitute minority among all road accidents.
Presentation – Direct Claims Adjustment
In 2014 we bought via the Internet and telephone over 5 mln of insurances. We paid PLN 1.05 billion. This is over 10.5 per cent less than last year. Via telephone and the Internet we preferably buy motor insurances. Last year we concluded 1.3 mln of third party liability insurance agreements and 344,000 of comprehensive motor insurance agreements. The premium which we paid for that kind of protection amounted to PLN 591 mln and PLN 197 mln respectively.
The data on the direct market shows that insurances bought in 2014 via telephone and the Internet were cheaper than a year before. For example, the number of comprehensive motor insurances increased by 0.44 per cent, while the premium decreased by 18.4 per cent – In the case of comprehensive motor insurance the decrease in premiums may result from the decrease of prices, but that is not the only reason. It may also be caused by narrowing by the customers the scope of protection, increase in deductibles, or by the decrease in the value of the insured vehicle – explains Paweł Zylm, Chairman of the PIU Direct Insurance Team.
Also in the case of motor third party liability insurance, the disproportion between premiums and the number of agreements is visible. In this case, the number of policies decreased by 6.6 per cent, while the premium decreased by almost 10 per cent at the same time. The most interesting trend in insurances other than motor insurances is insurance data on the damage caused by natural disasters. The increase of the number of policies year-to-year amounts to 24 per cent, while the decrease of premium reaches over 46 per cent. It may indicate either very high price discounts or greater sale of products of low insurance amounts or a narrow range of protection. The direct market is a sale channel to sell policies via telephone and the Internet that debuted in Poland in 2003. This sector noted particularly dynamic growth in 2006, and in 2012 for the first time it exceeded 5 mln policies sold.
Insurance companies in Poland detected in 2013 extortions of damages and benefits for the total amount of almost PLN 130 mln – according to the latest report of the Polish Insurance Association (PIU). 41 per cent more events on the life insurance market (Section I) and 3 per cent more events on the other personal and property insurance market (Section II) were detected in comparison to the previous year.
PIU has published an annual survey showing data on insurance fraud in Poland. Last year insurance companies detected altogether 8353 offenses involving attempts to extort damages or benefits for the total amount of almost PLN 130 mln. The data divided into key insurance groups are as follows:
Section I – life insurance
• 386 detected events, 41 per cent more than in 2012,
• The value of the detected events – PLN 10.1 mln – 58 per cent more than in 2012,
• The average value of the extortion – about PLN 26,000,
• The most common irregularities were associated with the death of the insured (41 per cent of cases), permanent disability as a result of the emergency insurance, and hospital treatment or surgery (17 per cent each).
Section II – other personal and property insurances
• Insurers have detected 7967 extortions or attempts of extortion (increase year-to-year by 3 per cent),
• The value of the detected events – almost PLN 120 mln, 16 per cent more than in 2012,
• The average value of the extortion – PLN 15,000,
• 66 per cent of cases referred to attempts of extortion of damages on motor third party liability insurance, 23 per cent referred to comprehensive motor insurance, and almost 2 per cent concerned personal accident insurance
– Not everybody is aware that the main victims of insurance criminals are customers of insurance companies. This is because damages and benefits are paid of the premiums paid by customers. So does any insurance system. The phenomenon of insurance crime and social approval of it result in increased insurance rates – says Jan Grzegorz Prądzyński, CEO of PIU.
In the case of comprehensive motor insurance an average extortion amounts to PLN 18,000. Taking into accounts the average market price of comprehensive motor insurance it means that one offense costs as much as the annual premium of 17 honest drivers. And in the case of motor third party liability insurance the average extortion amounts PLN 11,000, and it equals annual premiums for automobile liability insurance paid by 25 drivers.
– The analysis of data on crime detection clearly shows the effectiveness of the detection of attempts to extort damages and benefits is increasing. In particular it is noticeable for life insurance market and for corporation insurances. Unfortunately, we have to deal with increasing professionalization of criminals and participation of the organised crime groups – says Jan Grzegorz Prądzyński.
In Q1 2014 we concluded 2.87 million of insurance contracts by phone and on the Internet. This is less by 3.27% than in the previous year. Still, we paid PLN 537 million, i.e. almost 10 percent less than in the previous year.
The most popular types of insurance bought by phone and on the Internet are the compulsory third party liability insurance for the owners of motor vehicles (over PLN 300 million in premiums), along with vehicle accident and theft insurance (PLN 103 million). The insurance against other material damages become increasingly important (increase in premium from PLN 12.7 million to PLN 15.5 million).
“The traditional division between traditional and direct insurers no longer exists. The majority of direct companies reaches their customers also through the agents. Therefore, the premium collected by phone and on the Internet decreases,” said Paweł Zylm, the Head of the PIU Direct Insurance Team.
The direct market is the channel of insurance policy sales by phone and on the Internet, which appeared in Poland in 2003. The sector has observed a particularly dynamic growth from 2006 and already in 2012 it exceeded 5 million of sold policies for the first time.
Health Consumer Powerhouse [HCP] presents the seventh European evaluation of healthcare in Europe. Disproportions in access to healthcare are growing. The less wealthy European countries are in crisis. The EHCI report indicated the growing gap between rich and less wealthy countries which affects the private charges, time of waiting for the treatment and access to medicines.
The author of Euro Health Consumer Index report is Health Consumer Powerhouse. The opinions expressed in the report are those of the author.
PLN 5.8 billion worth of performances under life insurance contracts and PLN 3.37 billion of compensations and performances under the property insurance contracts were paid in Q1 2014 by the Polish insurers.
Motor insurance market
Significant numbers:
• Gross premium from third party liability insurance amounted to PLN 1.98 billion (decrease by 6.14 percent.)
• Gross premiums earned under vehicle accident and theft insurance amounted to PLN 1.35 billion (decrease by 0.53 percent)
• Technical result under the third party liability insurance amounted to PLN -20.8 million
• Technical result under vehicle accident and theft insurance amounted to PLN 105.7 million
Property market (excluding motor insurance)
The most significant numbers:
• Property insurance premium (excluding motor insurance) amounted to PLN 3.7 billion and was higher by 6.3 percent than a year ago
• Financial risks insurance premium keeps increasing (PLN 255 million with the year to year growth by 27.9 percent.)
• The highest share in the premium in the property insurance market continues to belong to fire and other natural disasters insurance at over PLN 1 billion. However, this constitutes a decrease year to year by 2,9 per cent.
Life insurance market:
The most significant numbers:
• Compensations and insurance benefits under all types of life insurance amounted to PLN 5.8 billion (a decrease by 11 percent)
• Life insurance premium decreased by 14.03 percent, down to PLN 6.93 billion
• Insurance premium from insurance capital funds (UFK) increased up to PLN 3 billion (by 4.19 percent)
• The decrease in insurance premium in the market continues to result from short-term life insurance, i.e. insurance policies combined with deposits.
Net financial result
In Q1 2014, the net profit of life insurance companies amounted to PLN 626 million and was higher than a year earlier by 1.84 percent. The property insurance companies closed Q1 2014 with a profit of PLN 546 million (decrease by 27 percent). Polish insurance companies paid PLN 327 million of corporate income tax for Q1 2014.
In the first quarter of 2014 the Poles purchased 1.69 million of insurance policies on the Internet or by phone, i.e. almost 3.5 percent less than in the equivalent period of the previous year. The gross premium collected in the same period of time amounted to PLN 258 million (- 8.4 percent).
Based on the data after Q1 2014, the Poles still prefer buying the third party liability insurance policies through the direct channel for motor vehicles ( PLN 143.6 million in premiums) and car accident and theft insurance (PLN 51.6 million). At the same time, the policies from the group of other material damage become increasingly important (increase in premium by 31.4 percent y/y up to almost PLN 8 million). Accident insurance premium remains on a similar level (decrease by 3.3 percent down to PLN 28.8 million).
“Q1 2014 brought a slight decrease of the premium compared to the equivalent period of the previous year. This result shows diversified methods of customer acquisition, mainly through using also the traditional channels by the majority of direct insurers. Moreover, pricing competition to win a customer still remains visible in this market. The number of policies sold in Q1 2014 is lower than in the previous year by only 3.4 percent,” said Paweł Zylm, Head of the PIU Direct Insurance Team.
Direct market is the channel of policies sales by phone and on the Internet which appeared in Poland in 2003. The sector has observed a particularly dynamic growth since 2006, and in 2012 it exceeded 5 million of sold policies for the first time.
Please find the latest report on the bancassurance market in Poland.
