STATISTICS: CEE, 1H2019: Bulgaria - highest growth rate in the region; Hungary - the Top 5 highest increase in GWP

CEE insurance markets maintained a positive trend in 1H2019. Overall, GWP went up by 6.11%, to EUR 19.86 billion. Paid claims grew at a similar pace, reaching EUR 11.75 billion (6.48% up y-o-y). Although at individual level the growth rates across the CEE countries were uneven, their weight in the regional GWP portfolio didn't change significantly.

Thus, Poland, with a regional weight of 38% (down by 1 percentage point y-o-y) remains the CEE leader, flowed by the Czech Republic (16.57%), Hungary (9.2%), Slovenia (6.63%) and the Slovak Republic and Romania, with almost an equal contribution to the regional premium production (5.87% and 5.78%, respectively).

While among the Top 5 countries, Hungary has achieved the best growth rate (+14.1%), the absolute champion in the region was Bulgaria, where GWP increased by 20.4% y-o-y. In both cases, the growth driver was the motor insurance sector, namely the MTPL class.

On the claims side, Latvia, Romania, Serbia, the Czech Republic and Bulgaria have seen the highest growth rates, all of them experiencing significant increases in the claims expenses on the property insurance lines as a consequence of the severe weather events. In some cases, the amounts of compensations paid for property insurance doubled or increased even more. In addition, some of countries have also recorded a significant increase in the claims expenses for the motor insurance lines. In fact, in absolute figures, while for motor insurance, at regional level, insurers have paid more y-o-y about EUR 391 million, the supplementary bill for property insurance was of only EUR 170 million.

Life insurance saw a slower growth than average, at regional level, of 3.05% y-o-y, to EUR 6.37 billion. Looking at the outliers, Poland continued its downward trend in life insurance and, with GWP decreasing by 2.45%, has generated a EUR 62.5 million decrease in the total life GWP. AT the other end of the scale, the Czech market has seen a 10.25% increase in GWP which translated in a contribution of EUR 111 million to the regional market growth. In relative terms, the smallest life insurance market in the region, Kosovo, recorded a 20% increase in premiums. Other markets that have achieved double digit growth rates were: Bosnia & Herzegovina (10%), Bulgaria (18.3%) the North Macedonia and Montenegro, with rates close to 14.5% each.

The Unit-Linked life insurance products have recorded mixed trends across the region: while in Croatia, the Czech Republic, Estonia, Hungary, Poland and Slovenia their popularity has significantly decreased, in Romania the segment saw a 42.5% increase in GWP, while a positive trend has been also seen in countries like Bulgaria, Latvia, Lithuania or the Slovakia, but at a significantly lower pace. Overall, the UL line has recorded a 14.8% y-o-y decrease in GWP, to EUR 1.98 billion. A common trend in several of the region's market was the slowdown of the policies surrender phenomenon.

The non-life insurance sector continued to account for the largest part of the regional GWP, with an almost 68% share in the total GWP (1 pp more y-o-y). At regional level, premiums written have increased by 7.63%, to EUR 13.49 billion. The CEE non-life portfolio remained quasi unchanged y-o-y, with motor insurance lines accounting for about 54% of the non-life GWP and property lines providing for an about 20% share. The to additional EUR 955 million premiums written in 1H2019 vs. 1H2018, the Polish market had the largest contribution (EUR 258 million), while Czechia and Hungary brought each about EUR 165 million. In relative terms, Bulgaria has reported the highest growth rate, of 20.9%.

Paid claims for non-life insurance went up by 11.9%, in average, to EUR 6.69 billion, with a few "peaks" as: Latvia (38.1%), Serbia (21.07%) or Romania (18.3%). While in Latvia and Serbia, the main source of the increase in non-life paid claims were the property lines, in Romania the motor classes have been the driver of the claims expenses increase.

Property insurance GWP have increased y-o-y by 4.92%, to EUR 2.67 billion, while paid claims went up by almost 21%, to EUR 987.3 million. Except for Albania, Macedonia and Serbia, all CEE markets have recorded positive growth rates. The first half of 2019, although not completely uneventful, was rather calm in extreme weather terms, at least in comparison with the previous years. Yet, the few episodes of heavy storms have once again showed the massive protection gap across the region, as only a very little part of the losses were insured.

Motor insurance lines remained the main non-life business lines in the region: Motor Hull accounted for 20.5% of the regional non-life premiums, while MTPL's share remained of over 33%. Both segments saw a positive dynamic, with GWP increasing by 8.55%, to EUR 2.76 billion for Motor Hull and 6.92%, to EUR 4.49 billion for MTPL. While on the Motor Hull side several markets saw a double-digit growth rate, on the MTPL side premiums grew at less impressive rates, except for Bulgaria and Hungary (26% and 33.7% respectively). The bad news is that both lines have also provided for most of the paid claims increase. While premiums growth was mostly supported by the increasing cars sales and only marginally by the rising prices, the increased spending with claims was the combined effect of raising repair costs and bodily injuries' compensations.


Access xprimm.com and download the CEE Regional insurance market statistics at June 30, 2019 - per countries and business lines.

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