Insurance Market In Poland 2008-2010, CEE Insurance Series: Industry Report

Insurance Market In Poland 2008-2010, CEE Insurance Series

Product Type: Market Research Report
Published by: Intelace Research
Published: June 2008
Product Code: R3432-20

Description

Growing market. With over 12 billion EUR in total annual premium written and ~40% premium share within CEE14* area in 2007, Poland is clearly the biggest single insurance market in this part of Europe. Nevertheless current insurance penetration benchmarks if compared to Western Europe suggest that further growth is possible, provided the local economy will sustain high growth. During the period of 2003-2007 the insurance sector in Poland experienced solid growth, both in life (31% premium CAGR**) and non-life segment (~15% premium CAGR**). The total insurance premium per capita reached 317 €, while the life /non-life premium ratio advanced to 139%

Falling concentration. The initially almost monopolized market is continuing de-concentration trend. PZU is still dominating on the market with: 25-50% share depending on segment. However, position of the giant is gradually eroding thanks to mid-size and smaller players aggressively challenging PZU with better sales skills, lower prices, more friendly customer service and alternative sales channels. It is also worth mentioning that few mid-size groups including: Vienna IG, HDI Gerling and ERGO grow fast by engaging in M&A activity and consolidate smaller players

Profitability. After record years 2005/2006 the profitability indicators of both non-life and life players have deteriorated in 2007. The combined profit of players in non-life segment fell down by almost 50%, affected mostly by quickly rising claims, higher acquisition costs and lower than expected investment result. In the life business insurers managed to grow profits by 14% in 2007 on a rapid premium growth of over 28% yoy., however, falling returns on investments will negatively affect 2008 profits

New sales channels. Entry of aggressive direct players in 2006/2007, price competition and increased role of banks initiated a structural shift in insurance sales channels. Although during 2005-2007 the traditional sales structures could still defend themself (especially in non-life segment), the increasing competition and price pressures will force even established players to redesign sales channels and introduce low cost / direct offers especially in case of low margin products

Still good perspectives. Strong economy, good condition of enterprises and increasing wealth of individuals driven by rising employment and higher wages will contribute to further growth of premiums. In mid-term perspective especially the non-life segment (property and motor insurance) is expected to show a solid premium growth following the revival on new cars market and increased property prices. In life insurance business the volatility of stock market is likely to temporarily negatively affect premium collection of unitlinked products. At the same time it is possible that tax friendly "deposit-like” insurance products with low risk profile will partially replace more risky investments.

Intelace Research expects that insurance premiums in Poland will grow by 8% & 13% in life and non-life segments respectively until 2010

Table of Contents

Slide 1: Executive summary
1. Macroeconomic overview
2. Insurance market
3. Non-life insurance
4. Life insurance
5. Bancassurance
6. Top players profiles
7. Forecast

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