Please find the PIU Report on the market of motor and property insurance in Poland.
We present the booklet “Insurance in Numbers 2013″ showing the most important data on the Polish insurance market in 2013.
Some of the important statutory tasks of the Polish Insurance Association are its educational and information activities in the insurance sector. Educating the society, in particular the youth entering their adult lives, who often have no basic legal knowledge necessary to manage their everyday reality – is very important.
PIU is the partner of the educational project “Legal First-aid-kit – Lex Without Tears” implemented by the Polish Judges Association “IUSTITIA” (the Silesia Branch). The First-aid-kit is a handbook addressed at the junior high school and secondary school students. It contains the compilation of the most important legal issues. One chapter is devoted to insurance.
The first-aid-kit is written with a simple language, providing many examples; it contains a lot of examples and its graphic form is attractive for teenagers. In the upcoming months, it will be distributed free of charge to school students during the lessons of law taught by the judges within the areas of the Silesia, Warsaw, Wielkopolska and Wrocław Branches of SSP „IUSTITIA”. PIU not only gave its financial support, but also its content-related support.
The Partners of the publication apart from PIU include also the Law and Administration Faculty of the University of Silesia and the National Chamber of Tax Advisors, along with the Katowice Academy of Fine Arts.
As many as eighty percent of the Polish drivers are not aware that before sitting behind the wheel of a car that does not belong to them they should make sure whether its owner holds a third party liability insurance – according to the results of public opinion surveys conducted last week*. They do not know that driving an uninsured vehicle exposes them to very high financial consequences. For the first time ever, all the insurance institutions operating in Poland, including the financial supervision, united their forces and activated a joint information campaign in the Internet, entitled: “Do not enter a relationship you are not ready for”. The Insurance Guarantee Fund (UFG) is the initiating party and the main sponsor of the whole campaign, along with the partners: the Polish Insurance Association (PIU), the Polish Office of Motor Insurers (PBUK), the Polish Insurance Ombudsman (RzU) and the Polish Financial Supervision Authority (KNF), as the honorary partner.
The Poles use cars, tractors, motorbikes, quads, etc., which are not their own property increasingly often. Last year, every fourth road accident was caused by a driver who did not own the driven vehicle – according to the national database of insurance policies maintained by UFG (the Insurance Guarantee Fund). And this percentage keeps growing: it has doubled over the last five years. At the same time, only 20 percent of Polish drivers know that if they have an accident driving the vehicle without the third party liability insurance – they must pay for its results themselves – together with the owner of the vehicle who failed to buy the insurance. The accident victims receive a compensation from UFG – if the event takes place in Poland, otherwise the compensation is refunded by the Polish Office for Motor Insurance (Polskie Biuro Ubezpieczycieli Komunikacyjnych – PBUK) – if the accident takes place abroad**. After paying claims, both these institutions, however, demand the paid amount to be returned (the so-called recourse claim) – both from the driver and from the owner of the uninsured vehicle.
Only in 2013, UFG commenced 3.5 thousand recourse procedures, i.e. 400 more than in the previous year. The average recourse amounts to PLN 10 thousand – over twenty times more than the average premium for motor third party insurance in Poland. This shows how much it does not pay back to drive without this insurance, especially because the record amount to be returned was over PLN 1.6 million. Also, the number of recourse claims exceeding several thousand PLN is growing. At the end of the last year, the Fund proceeded with a total of almost 18 thousand cases – against the drivers and uninsured owners of vehicles – for recovery of compensations paid to the victims of accidents. The total claims for recourse damages exceeded PLN 160 million.
We tend to go abroad by car more frequently, which leads to a higher number of accidents caused by the drivers of the vehicles with the Polish registration plates. Only in 2013 there were 44.1 thousands of such events (3 thousands more than in the previous year). Last year PBUK refunded compensations for 208 damages caused by the Polish vehicles without valid third party liability insurance.
This was the reason why the Polish Office paid almost PLN 4 million, i.e. 24 percent more compared to the previous year. At the end of 2013, the total receivables of PBUK from the uninsured amounted to PLN 18.4 million (an increase by 16 percent); over seven hundred recourse claim proceedings are pending. The average value of the damage, against the data from 2012, grew by PLN 800 and amounted to PLN 15.4 thousand, while the highest recourse by PBUK exceeds PLN 3 million.
Also those who had valid third party liability insurance but caused an accident while driving under the influence of alcohol or drug substances or ran away from the place of the accident or had no driving licence, etc. *** may expect to be expected to refund the paid compensation. The data gathered by the Polish Insurance Association suggests that annual accounting value of recourse claims addressed at people driving under the influence may amount to PLN 50-60 million. The average damage related to driving under the influence is PLN 10-12 thousand and is over twice as high as the average motor third party liability insurance related damage in Poland (PLN 5 thousand). The maximum recourse against drivers under the influence of alcohol or drugs, in turn, exceeds PLN 2 million. Such a serious personal injury occurred several years ago.
The joint campaign of UFG, PIU, PBUK, RzU and KNF includes four companies which are going to be promoted in the Internet. The campaign was prepared together with Walk Digital, an advertising agency which cooperates with Mojo Films, a film producing company. The script for film spots was written by Aleksander Frydrych and Dariusz Rzontkowski was the director – both of them belong to the Walk Group. The budget of the whole campaign, together with the media support, did not exceed PLN 135 thousand.
Elżbieta Wanat-Połeć, the President of the Insurance Guarantee Fund said: “The purpose of the campaign is to expand the circle of persons interested in whether the particular vehicle has a third party liability insurance and to show the drivers that it is not only the problem of the vehicle’s owner. We will commence the campaign just before the holiday season starts, because this is when we most often drive somebody else’s car. For me it is also important that for the first time in the history of Polish insurance we managed to unite for such important cause which over 20 million of Polish drivers should find quite important.”
Jan Grzegorz Prądzyński, the President of the Management Board of the Polish Insurance Association said: “It is very worrying that so many people not only drive without the third party liability insurance, but, above all, that they have no idea about the consequences it may cause. It is good that one of the films from this campaign shows the problem of drunk driving. It is a real problem on the Polish roads. Moreover, I am very happy that all the market institutions, together with the finance supervision, decided to organise such a campaign.
Mariusz Wichtowski, the President of the Polish Office of Motor Insurers said: “Third party liability insurance not only allows the injured party to obtain compensation, but it also protects the property of the vehicle owner and of its driver. Having no policy may ruin the whole family and disable its everyday life. The same rules are binding not only in Poland, but also in the whole European Union; therefore, it is worth getting the insurance and being protected.
Aleksandra Wiktorow, the Ombudsman of the Insured, said: “Each person sitting behind the wheel of a vehicle must be confident that they have the valid third party liability insurance. When we move in an uninsured car or when we are under the influence of alcohol – we must expect huge claims for return of the insurance paid to the possible accident victims. More and more such cases end up with the Ombudsman and the claimed amounts exceed the financial possibilities of those liable, and in some cases they result in financial ruin of the whole household. This is why it is so important to organise a joint information campaign.”
Andrzej Jakubiak, the Chairman of the Polish Financial Supervision Authority, said: “The persons driving vehicles without the third party insurance cause problems above all to themselves, but because the costs of accidents caused by them are also covered by those who are insured according to law, then driving without the third party liability insurance should not be socially acceptable.”
Examples of recourse claims against accident perpetrators:
UFG paid over PLN 410 thousand. An owner of a truck, in his forties, without third party liability insurance, blocked the road of a passenger car while changing the lane in the wrong place and the car drove into the van. A young married couple died in the accident, their several-year-old son was only slightly injured. The element of insurance, which UFG continues to pay was the monthly pension for the orphaned boy. This case was recently reopened: the family filed for a compensation to the child for its parents death. The Fund claims recourse against the accident perpetrator who tries to hide his property.
UFG paid over PLN 440 thousand. A man in his twenties, while driving an uninsured car of its employer (contract of mandate), forced the right of way. The injured person (at the time of the accident – an owner of a private company, providing for his family) lost his eyesight almost completely as a result of this accident, and now he is in the first group of disability and requires everyday help. The fund demanded the return of paid compensation both from the owner of the uninsured vehicle and from the accident perpetrator. The car owner died a few years ago having paid back only part of the debt. Since then, UFG demands the refund of compensation only from the car perpetrator.
UFG paid over PLN 760 thousand. A twenty-year-old owner of an uninsured car lent it to a friend who caused an accident and died in it. Hence, UFG claims damages only from the uninsured owner of the vehicle who initially refused to accept his liability. He thought that only the accident perpetrator is liable for the accident. One of the passengers of the borrowed car who had his spine broken in this accident, has dysfunctional limbs and needs constant care, claimed compensation. Doctors declared permanent damage of his health exceeding 130 percent. Disability pension amounting to PLN 3 thousand a month (including increased needs) is part of the compensation.
PBUK paid over PLN 2.6 million. Eight years ago, during a holiday trip in Germany, a car registered in Poland drove into the opposite lane causing a head-on collision with the upcoming car. The injured driver of the other car, a German citizen in his twenties, was seriously injured. It is doubtful whether he will ever be able to work. His condition was so critical that the German party informed about creating a reserve for this damage in the amount of the guaranty sum required in Germany as at the date of the accident, i.e. EUR 2.5 million (per person). So far, PBUK repaid several hundred thousand EUR to the German party (an equivalent of over PLN 2.6 million) and the case remains open. After paying the compensation the Polish Office claimed the recourse from the owner and driver of the car with the Polish registration plates. As the debtors failed to pay voluntarily, the case was redirected to the court. PBUK received an execution title and directed the case to the bailiff who started the enforcement procedures.
* the research was commissioned by UFG, performed by GfK Polonia – between 5 and 9 June 2014 on a national, representative sample of 1000 persons aged over 15.
** refers to the vehicles registered in Poland without valid third party liability insurance; in practice the compensation for victims of an accident caused abroad by a vehicle with Polish registration plates is paid by an equivalent of PBUK (i.e. an office for motor insurers) in the country in which the accident occurred, and these expenses are then reimbursed by the Polish Office.
*** details in Article 43 of the Act on compulsory insurance by UFG and PBUK.
In 2013 Polish insurers paid out PLN 23 billion in the form of life insurance benefits and PLN 13.7 billion in the form of compensations and non-life insurance benefits.
Motor insurance market
Key data:
• Motor third party liability insurance – 1 million of compensations and benefits paid out in the amount of PLN 5.39 billion
• Vehicle own damage insurance – almost 700 thousands of compensations paid out in the amount of almost PLN 3.5 billion
• Gross written premium from motor third party liability insurance amount to PLN 8.25 billion (down by 5.62 percentage points)
• Gross written premium from vehicle own damage insurance amounted to PLN 5.32 billion (down by 5.43 percentage points)
PIU comment:
In 2013 on the motor third party liability insurance market we dealt with a higher number of damages than the year before. As a result of this increase, the total amount of insurers’ charges of motor third party liability insurance increased YoY by 1.02 percentage points.
Technical result of motor third party liability insurance remained negative and in 2013 amounted to PLN -266 million (in the previous year:
PLN -467 million). – Since many months we have been emphasizing that there has been imbalance observed in the motor third party liability market. The results at the end of 2013 confirm this disproportion – says Jan Grzegorz Prądzyński, President of the Management Board of PIU.
Non-life market (excluding motor insurance)
Key data:
• Premium from non-life market (excluding motor insurance) exceeded PLN 13 billion and was by 9.6 percentage points higher than the year before.
• Premium from insurance of financial risks increased significantly (almost by 41 percentage points). It results, inter alia, from the adjustment of tariff rates to the risk level.
PIU comment:
In 2013 both insurance against damage caused by fire and other natural forces (class 8) and insurance against damage to property (class 9) remained profitable. Significant increase in the number of mandatory insurances of farm buildings may result from a change in the method of results reporting by insurance companies. This may be proven by two facts:
• The number of farms in Poland is decreasing, which should cause a decrease rather than an increase in the number of insurance policies.
• Premium from mandatory insurance of farm buildings has not increased significantly, which supports the assumption concerning a change of the reporting method, not a rapid increase in the number of farm buildings in Poland.
Life market
Key data:
• Total compensations and benefits from all life insurances amounted to PLN 23 billion (down by 10.91 percentage points)
• Premium from life insurance decreased by 14.05 percentage points to PLN 31.26 billion.
• Premium from insurance equity fund (in Polish UFK) policies increased to PLN 13 billion (by 8.34 percentage points), with a similar number of policies
PIU comment:
Short-term life insurances, the so called policy-deposits have an impact on a decrease in a premium on the market. It is in this class of product where the highest fall in a premium has been observed (over 32 percentage points). However, a premium relating to long-term savings (insurance equity fund) is increasing along with an increase in the value of payments for such insurances (PLN 7.4 billion in 2013, up by 11.59 percentage points compared with the previous year.)
Net financial results
In 2013 the net profit of life insurers exceeded PLN 2.8 billion and was by 4.78 percentage points lower than the year before. According to the data from financial statements, non-life insurers ended the year 2013 with a profit of PLN 6.14 billion. It should be clearly emphasized that this result is connected, first of all, with the dividend policy of the Polish largest insurance group. In 2013 Polish insurers paid PLN 1.14 billion of income tax.
We invite you to read the newest report of the PIU concerning the bancassurance market in Poland.
Report: Polish bancassurance market after the 4th quarter of 2013
The Polish Insurance Association sends hereby a report including the analysis of quarterly and annual results of the motor insurance sector for 2011-2013. In the majority of categories the analysis covered also 2009-2010 in order to present and interpret the impact of crisis phenomena and market trends.
Insurance market in Poland, overview of data from 2011-2013
In 2013, the insurance companies issued in total 5.18m policies under the direct system, i.e. bought via the Internet or the telephone. The premium collected from those contracts after four quarters of 2013 amounted to PLN 1.175bn and decreased year-to-year by 1.2%. According to the data gathered, the sales via the direct channel visibly stabilised.
In 2013, the biggest number of contracts concluded via the telephone and the Internet was attributable to motor insurance: Third party liability insurance of owners of motor vehicles accounted to 55.9% of the premium, and comprehensive insurance – 20.5%. However, a growing market share of another type of insurance is observed.
“The year 2013 was the time of consolidation of the sales level; however we observe a further increase in premiums for non-motor products. For example, the premium for assistance insurance increased by 9% year-to-year and for insurance against other damage to property by nearly 6%”, says Paweł Zylm, Chairman of the PIU Direct Insurance Team.
Insurances sold via the telephone have been available in Poland since 2003. This channel has been significantly growing year over year. The years 2006-2007 proved crucial as in that period the number of insurance companies offering policies sold under the direct system substantially grew. In the year 2012, the number of policies sold via the Internet and the telephone exceeded for the first time 5 million. “Along with the development of smartphones, the clients’ interest in buying insurance policies with the use of the simplest tools available to them, which are always handy, will be growing” says Paweł Zylm.
Table of direct market results
In 2013, the insurance companies issued in total 5.18m policies under the direct system, i.e. bought via the Internet or the telephone. The premium collected from those contracts after four quarters of 2013 amounted to PLN 1.175bn and decreased year-to-year by 1.2%. According to the data gathered, the sales via the direct channel visibly stabilised.
In 2013, the biggest number of contracts concluded via the telephone and the Internet was attributable to motor insurance: Third party liability insurance of owners of motor vehicles accounted to 55.9% of the premium, and comprehensive insurance – 20.5%. However, a growing market share of another type of insurance is observed.
‘The year 2013 was the time of consolidation of the sales level, however we observe a further increase in premiums for non-motor products. For example, the premium for assistance insurance increased by 9% year-to-year and for insurance against other damage to property by nearly 6%,’ says Paweł Zylm, Chairman of the PIU Direct Insurance Team.
Insurances sold via the telephone have been available in Poland since 2003. This channel has been significantly growing year over year. The years 2006-2007 proved crucial as in that period the number of insurance companies offering policies sold under the direct system substantially grew. In the year 2012, the number of policies sold via the Internet and the telephone exceeded for the first time 5 million. ‘Along with the development of smartphones, the clients’ interest in buying insurance policies with the use of the simplest tools available to them, which are always handy, will be growing’ says Paweł Zylm.
The table presenting direct market results
We invite you to study the most recent PIU report on the bancassurance market in Poland.
