Class 3 and class 10 technical results have significant impact on the results of operations and, as a consequence, on solvency ratios and the ability of these companies to meet their obligations under concluded insurance contracts. According to KNF figures, as of 31 December 2018, Motor Hull amounted to 20.52% of total non-life GWP volume, while MTPL formed 37.52% of non-life GWP.
The KNF pointed out that insurance companies need to thoroughly analyze the billing process, review the claims handling process and the relationships with insurance intermediaries, as well as with customers, as a factor of determining realistic estimation of the future level of claims and operating costs, and consequently the required size of motor tariffs.
Improvements have been seen for class 3 and class 10 results in previous years, as a result of a notification sent to Polish insurance companies in September 2015 by KNF. 2016 was a bad year for MTPL business line profitability; insurers faced multiple technical losses; however, the situation in 2017 and 2018 improved, some companies managing to achieve technical profit, but the majority of them (14 companies) still recorded losses on the MTPL segment.
The issue regarding technical provisions remains important from the point of view of insurance company liability under MTPL contracts, in particular for non-pecuniary damage (including compensation offered for the family of an injured party, who suffered severe and permanent damage to health), resulting in the need for insurance companies to permanently ensure an adequate level of reserves.
In the opinion of the supervisory body, it is necessary for local companies to continue activities that will ensure adequacy of premiums for motor insurances lines of business in the long run. By the end of 2019, KNF will request that insurance companies to provide information about planned activities and actions regarding premium rates, claims handling, rental vehicles, cost ratios, reserves and other aspects related to motor insurance classes sustainability.