Boston, MA -- (SBWIRE) -- 01/02/2013 -- Key Insights And Key Risks
2012 will not be seen as a vintage year for Lithuania's small and crowded insurance sector. Volatility in financial markets has sharply curtailed savers' appetite for unit-linked insurance products, demand for which had been growing quite rapidly in early 2011. This is, in any case, in a country where the relatively few people who have the money and inclination to use life insurance were spending only modest amounts per capita. In part because of the maturity of policies that had been issued in early 2002, payments by the life companies to their customers have soared. Nevertheless, we stress that the three companies that account for about 60% of all activity in the life segment, SEB Life and Pensions International, Swedbank Life Insurance and Mandatum Life, have financial strength, brand strength, diverse distribution channels and a firm commitment to the market.
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By contrast, developments in the non-life segment have been favourable. Thanks to growth in health insurance and CASCO, premiums are growing again. For now, the price war in motor-related lines appears to have stopped. Insurers are benefiting from a firming in rates. This is happening at a time that claims expenses have fallen relative to H111: profitability is rising for most of the players. Some companies are reporting very strong growth in premiums. More crucially, virtually all the non-life companies are looking to compete on service. As a result, they have invested heavily in call centres, market research, online tools and claims management processes. Lietuvos Draudimas, the former state owned company that is now a part of the RSA group, continues to speak for about one third of all non-life premiums that are being written in Lithuania.
In this report we have incorporated:
- BMI's latest forecasts for the Lithuanian economy.
- Official data, published by the regulator in relation to developments in the sector through H112.
- Comments from several of the leading players in relation to conditions in late 2011 and H112.
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