The amount of premiums written in the first half of the year in the Latvian insurance sector remained at last year’s level, reflecting the impact of the crisis on the sector – with declining economic activity and employment, customer demand for new insurance services slowed down.
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According to the data compiled by the Latvian Insurance Association (LAA), in the first six months of 2020 the total amount of written premiums was 277 million euros, which is the same as in the first half of 2019. There was an increase in premiums in only two major types of insurance: life insurance by 15% and health insurance by 5%.
“The increase in life insurance was ensured only by the new life pension contracts. In turn, health insurance policies are traditionally renewed in the first three months of the year, therefore at the beginning of the year there are usually positive growth trends in health insurance premiums,” says LAA President Jānis Abāšins.
Two major types of car insurance – land transport owners’ CTA (including MTPL) and CASCO – in the first half of the year saw a decrease in premiums compared to last year, by 12% and 8%, respectively, while property insurance remained at last year’s level without experiencing growth or decrease.
Proportionally, the largest decline in premiums was in travel insurance – 32% compared to last year. Travel insurance is not a large part of the insurance market – it accounts for one and a half percent of total premiums and claims, but it was the first to experience the effects of the pandemic, when tourism came to a complete halt in March, with a slight recovery in the second half of June.
In the first half of the year, 164.4 million euros were paid in insurance claims to customers, which is 15% less than last year.
“However, there is one very specific reason for this decrease – in June 2019, the historically largest property insurance indemnity in the Baltics in the amount of 37 million euros was paid, so this year, compared to this cost, statistics show a decrease in indemnities. In the first five months of the year , insurance claims paid to customers had increased by 11%, “says Abashin.
The largest increases in claims are in travel insurance (28%), life insurance (20%) and general CTA (37%). Most of the travel insurance claims were received by individuals who experienced travel difficulties due to the restrictions caused by the virus.
Remuneration of land transport owners’ CTA (including MTPL) and KASKO has grown very minimally – CTA by 2% and KASKO by 1%. During the restrictions of the pandemic, people traveled less, many passengers and freight carriers came to a standstill, and the number of accidents and compensation costs decreased accordingly.
In health insurance, 9% less claims were paid to clients. “Back in March, health insurance claims increased for clients, but decreased due to the physical unavailability of services. Doctors offered and insurers also paid for remote consultations, but the lack of face-to-face services led to a drop in claims costs. We expect claims to rise again in the second half. care facilities are available again, and people will rush to receive deferred services, “predicts the head of the LAA.
TOP 5 types of insurance in Latvia by the amount of written premiums
Life insurance – 63 million euros (22.7% of the market, + 15%)
Health insurance – 59 million euros (21.3% of the market, + 5%)
Land transport CTA – 47.1 million euros (17% of the market, -12%)
CASCO – 43.1 million euros (15.6% of the market, -8%)
Property insurance – 36.1 million euros (13% of the market, 0%)
TOP 5 types of insurance in Latvia by the amount of paid claims
Life insurance – 46.9 million euros (28.5% of the market, + 20%)
Health insurance – 31.4 million euros (19.1% of the market, -9%)
Land transport CTA – 28.8 million euros (17.5% of the market, + 2%)
CASCO – 28.8 million euros (17.5% of the market, + 1%)
Property insurance – 18.6 million euros (11.3% of the market, -63%)
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