Boston, MA -- (SBWIRE) -- 02/02/2015 -- The life segment, despite being smaller than the non-life segment and facing the challenge of low affordability at present, will outperform over the coming years as it grows from a low base and benefits from Latvia's introduction into the Euro. While the non-life segment will retain its majority of the insurance market in 2018, its share will decline from 88.1% currently to 86.0% by 2018.

The non-life sector accounts for the majority of Latvia's insurance market with a share of 88.1%. Furthermore, with a density of USD197 per capita, the country's non-life sector can be considered to be rather well-developed. The density is second among the Baltic states after Estonia and ahead of a major market such as China, which has a non-life insurance density of USD140 per capita. However, despite its large size with regards to the total sector, Latvia's non-life segment like many other Central and Eastern European markets suffers from many unprofitable lines, especially for smaller players which lack scale.

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There is both a lack of affordability and awareness of the benefits of life insurance among Latvian households with the regulator recognising the need for educating consumers on the benefits of life insurance. At the same time, the life insurance segment remains in competition with other saving channels such as pension plans (both state sponsored and private). These headwinds have resulted in the life segment only making up 11.9% of the entire insurance sector.

However, over the 2015-2018 forecast period, we expect the life segment to outperform the non-life segment, which will see gross life premiums growing at an annual average of 8.2% in USD terms to hit USD71.4mn by 2018. Our forecast is underpinned by our expectation for stable economic growth over the coming years, which will increase the ranks of middle-class consumers and concurrently result in a rise in demand for life insurance from a low base.

Over the 2015-2018 period, we forecast growth in...

The Latvia Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's Latvia Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Latvian insurance industry.

Key Benefits

- Benchmark BMI's independent insurance industry forecasts for Latvia to test other views - a key input for successful budgeting and strategic business planning in Latvia's insurance market.
- Target business opportunities and risks in Latvia through our reviews of latest industry trends, regulatory changes and major deals, investments and macroeconomic developments.
- Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI?s key industry forecasts and views, covering the Life and Non-Life segments, the evolving competitive landscape and business operational risks.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the insurance sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2005-2014) and forecasts to end-2019 for key industry indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

- Life/non-life Premiums: Total premium growth (USDmn), premium growth (% y-o-y), penetration (% of GDP), density (USD per capita) for Life and Non-Life sectors, claims reinsurance, and assets and liabilities.
- Non-life subsectors: Data on gross written premiums for all major Non-Life segments (motor, transport, property, personal accident, health, general liability and credit financial).

BMI's Insurance Risk Reward Index

BMI's Risk Reward Indices provide investors (Life and Non-Life) looking for opportunities in the region with a clear country-comparative assessment of a market?s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

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