XPRIMM: How would you comment on the Polish market's evolution in the recent years?
Jan Grzegorz Pradzynski: First of all, over the recent years, prices on the motor insurance market have stabilized. The years 2015-2017 were the period of increases in prices of MTPL insurance in Poland. It was connected with the costs of claims which were on the rise for many years. Currently, there is a pressure to reduce prices, which was already observed in Poland before 2015.
Motor insurance is the biggest segment of the insurance market in Poland, but, naturally, not the only one. Year 2019 marks the beginning of an important reform connected with long-term saving. On 1 July 2019, Employee Capital Plans (PPK) were launched in Poland. They are funds created by the employer in which employees, supported by the state, can save in the long term. Insurers are part of that reform not only as entities which have created the PKK, but also which distribute them.
XPRIMM: What are your expectations for the near future? Which are the main trends that you expect to influence your market's evolution in the near future?
J.G.P.: Trends aren't so much about the type of insurance, but rather technology and changes of behavior. Insurance "on demand" will be one of such trends. It's connected, for instance, with development of personal transport devices (personal light electric vehicle). With rental of such devices being more and more popular, "per hour" or even "per minute" insurance should appear aimed at users of e.g. electric scooters. Insurance on demand also slowly starts to apply to cars. The first offer which allows taking out autocasco insurance per minutes has already appeared in Poland.
As for the business lines which will develop, health and long-term care insurance will undoubtedly be among them. We live longer and longer, so being in good health is more and more costly. Private insurance not only offers access to state-of-the-art treatment methods, but, first of all, to good diagnostics. It's also promotion of health-improving behavior. As we live longer, the demand for long-term care insurance, which will guarantee old age care, will be on the rise.
XPRIMM: Which were, in your opinion, the factors that favored a more rapid evolution of the Polish insurance market as compared with its regional peers?
J.G.P.: Poland's size is definitely the most important here, but we should also remember that the country implemented modern insurance law adapted to the business development very fast, as well as established professional institutions, such as competent supervision, strong consumer organizations or modern, obligatory industry self-government. Thanks to it, we can effectively introduce in Poland the best standards, e.g. direct loss adjustment in MTPL insurance.
XPRIMM: Life insurance maintained a negative trend throughout the last years in your country. How do you explain this trend and what are your expectations for the future?
J.G.P.: For many years development of the life insurance market in Poland was connected with growing sales of insurance and savings products. As a result of new, very precise regulation, investment products have changed, and if you want to sell them, you have to comply with a much bigger number of procedures connected, among other things, with the client needs analysis. I hope the life insurance market will grow, but this time in connection with classic individual life products. There are definitely not enough such insurance products in Poland. The market is dominated by group life insurance policies with relatively small sums insured.
XPRIMM: MTPL is one of the most challenging business lines. In this context, how would you comment on the MTPL insurance market's status?
J.G.P.: Apart from the insurance on demand, which we have already mentioned, it's worth saying a few words about telematics. Poland is at the beginning when it comes to this solution. On the market we already have insurance offers in which the premium depends on the driver's driving style. Naturally, that style is monitored. In addition, solutions connected with assistance or even rescue actions slowly start to appear. Currently, technology allows calling for help to a person injured in an accident, when a system installed in a car sends a message that an accident may have happened to the insurer's emergency center.
XPRIMM: Poland may pride itself with one of the highest percentages of insured residential/commercial buildings in the region. Yet, considering the evolving nature of the weather risks, would you say that the current situation is good enough to face the challenges brought by the climate change in NatCat terms?
J.G.P.: At the end of 2018, our report entitled "Climate of Risk" was published. It indicates the Polish regions exposed to the biggest risk of sudden weather phenomena. We also present the scale of losses which a big natural disaster could cause in Poland today. Apart from that, we conducted a social campaign to make Poles aware of how to behave in the case of weather threats. The Polish insurers, both in financial and operational terms, are prepared for loss adjustment connected with the elements. It was demonstrated by the 2010 flood, storms and torrential rains in the following years, as well as this year's flooding. Consequently, we are prepared in terms of protection, so our work is focused on awareness raising.
XPRIMM: Poland is the biggest FinTech market in Central and Eastern Europe. How much of this market is insurance oriented and what was so far its impact on the local insurers' activity? Are there any barriers for InsurTech innovation in your country?
J.G.P.: Digitalization opens up numerous doors to the economy. But behind those doors, there are guards in the form of the GDPR, supervision authorities and various regulations. Consequently, digitalization can't be a concept hanging in the vacuum. Each technological solution needs to involve such changes in law to make the use of the solution possible for and beneficial to consumers.
There are numerous challenges, with citizen's digital identification being one of them. Each citizen should have one digital identity on the basis of which it will be possible to handle administrative matters, and take out any type of insurance remotely - even the most personalized one. Today, a client has a number of parallel digital identities, e.g. solutions offered by commercial suppliers in contacts with private entities (mojeID offered by the financial sector), and ePUAP in contacts with the state administration. If we don't start to work on the uniform digital personality, US corporations such as Facebook or Google will do it instead of us.
Interview conducted by Daniela GHETU