The CZECH Rep. FY 2012: Higher profitability despite the stagnant trend in underwriting

11 April 2013 — Daniela GHETU
The Czech insurers ended 2012 with a EUR 603.6 million aggregated profit before taxes, a 36.3% higher figure than in 2011, despite the stagnant trend of the underwriting activity. In terms of gross written premium, last year's results are fairly comparable with 2011 figures, with a total premium production of EUR 6.1 billion, 1.6% higher y-o-y considering the values of the main market indicators denominated in Euro. In national currency, GWP amounted to CZK 153.6 billion, almost 1% less than in 2011.

Life insurance recorded a 2.7% y-o-y growth, in Euro, to a total amount of GWP of EUR 2.87 billion. Yet, looking at the main classes included in the life insurance segment, it is interesting to observe that GWP for Unit-Liked products grew by 6%, to EUR 1.5 billion, increasing the class' share in the overall market portfolio by about 1pp, to 24.6%, while the indemnities paid for the same business line increased by 38%, to EUR 700 million, following a 40% growth of the sums paid for early terminating policies. Yet, the number of active UL insurance policies grew by about 220 thousand y-o-y.

The highest growth rate among the life insurance line was reported for the "Personal injury or sickness" class, which recorded a 12.4% growth in GWP, to EUR 381 million. On the other hand, despite a 17% growth of the total number of active policies, gross premium written for "Assurance on death, survival etc." decreased by about 4.8%, to EUR 848 million.

On the non-life insurance side, the slight appreciation the CZK exchange rate translated the almost 2% decrease of the GWP figure, in local currency, in a y-o-y 0.7% positive change shown by the GWP denominated in Euro. Thus, the total underwritings of the Czech non-life insurers amounted to EUR 3.24 billion.

The highest growth rates were achieved on two business lines accounting together for about 3% of the market portfolio, "Financial loss" insurance - 12.17% y-o-y growth -, and "Travel" insurance, 11% growth.

GWP for property insurance amounted to EUR 828.6 million, 3.85% up y-o-y, while the claims paid for the same class decreased by 9.2%, to EUR 354 million. On the motor insurance lines, the 2012 results showed a steady evolution for the Motor Hull business (EUR 576.7 million in GWP) and a 2.8% decrease on MTPL, to EUR 789.6 million. However, it is interesting to observe that the total number of MTPL policies increased by about 313 thousand units. On the claims side, while the paid claims for Motor Hull contracts decreased by about 3.5%, the expenses made by insurers for the MTPL claims remained at the same level as in 2011.

The technical result was positive both for life and non-life insurance and was significantly higher as compared with 2011, mostly due to the higher amounts transferred from the financial placements' earnings to the technical account. Thus, the result of the technical account for life insurance was of EUR 260 million, while for non-life insurance was of EUR 288 million.

CESKA pojisovna, KOOPERATIVA VIG, ALLIANZ are the Top 3 market leaders, with an aggregated market share of 53.8%, in GWP terms.

Access www.xprimm.com and download the FY2012 Czech Republic insurance market statistics.

Market portfolio (in EUR and CZK) according to the Czech National Bank (CNB):
  • Gross written premiums
  • Growth rates
  • Paid claims
Market rankings in EUR and CZK (GWP/Market shares/Growth rates) according to the Czech Insurance Association (CAP):
  • Overall market ranking
  • Life insurance ranking
  • Non-life insurance ranking
  • MTPL insurance ranking
  • Motor hull insurance ranking

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