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Lithuania Insurance Report 2008Product Type: Market Research ReportPublished by: Business Monitor International Published: April 2008 Product Code: R302-3160 Description Over the next five years Lithuania’s insurance sector should change in three ways. First, it willundoubtedly be substantially larger than it is at present, notwithstanding the fact that percentage growthrates are likely to slow from the (blistering) rates of 2006. We are looking for compound annual growthrates (CAGR) of around 20% in 2007-2012. Second, it will undoubtedly be more sophisticated. The nonlifesegment is still dominated by compulsory third party motor liability (CTPML) business, but otherlines (and notably voluntary motor insurance - or CASCO) are also growing quickly. Property insuranceis rising rapidly from a low base. In the life segment, it appears that Lithuanians accept the concept ofinsurance as an attractive organised savings opportunity. Unit-linked business has been driving thegrowth.Interestingly, pricing in both segments appears to have been firm. This is in spite of the presence of asurprisingly large number of foreign-owned groups in both the non-life and the life segments. Theopening of the market to foreigners, and closure of unprofitable small firms by the regulator, means thatthere are no predominantly Lithuanian-controlled firms that are substantial. This has implications for thethird way in which Lithuania’s insurance sector is likely to change over the coming years. The number ofplayers will likely continue to contract. It is not clear why the country needs 10 non-life and eight lifecompanies. For those insurers who are owned by major foreign groups, the Lithuanian operations aregenerally a tiny part of their global - or even European - business. The other insurers are, for the mostpart, subsidiaries of Latvian companies. This is significant because both the economies of both Lithuania and Latvia are overheating. At somestage, the authorities in both countries are likely to take steps to engineer economic landings which, in thecase of Latvia, will probably be hard. It would not be surprising if at least one of the Latvian groups thatare competing in Lithuania becomes a forced seller of its business in that country. Table of Contents
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