Insurance markets in Central and Eastern Europe on course for convergence
The sustained positive economic performance in Central and Eastern Europe is increasingly having an impact on growth rates for the insurance industries in these markets. Higher incomes and increased consumer spending by households also involve increased demand for insurance products.
Following many years of weak growth in premiums as a consequence of the financial crisis, the insurance markets in CEE (excluding Russia) were able to pick up significant speed last year according to the results currently available, with double-digit growth in premiums of more than 10 per cent. There was an increase both in life and in non-life insurance in all geographic segments as compared with the previous year.
Strong demand for insurance solutions in CEE is apparent primarily in property insurance, which was able to achieve the strongest growth by far since the start of the financial crisis, with an increase in premiums of around 15 per cent in 2017. All of the markets in Central and Eastern Europe reported a significant rise in premiums with this – including the markets of Ukraine and Russia, which were most recently significantly affected by political conflict. Growth stimulus in the non-life sector last year came mainly from the vehicle insurance line, in which higher vehicle inventories as a result of a significant rise in new registrations and rising average premiums for vehicle liability insurance in some of the major insurance markets (e.g. in Poland and Hungary) led to high growth in premiums.
The Central and Eastern European life insurance markets also performed positively last year, stabilising in 2017 and registering growth once again for the first time since 2012. Both the demographic developments and the shortcomings of state pension systems in some markets point to rising demand for supplementary private insurance products. Although business in classic life insurance products is also declining in these markets, unit-linked provision has seen high growth rates in some Eastern European countries (e.g. in Poland and Romania).