Insurance markets in Central and Eastern Europe on course for sustained growth
CEE is one of the fastest-growing economic regions around the world. The convergence process with Western Europe is also continuing thanks to the persistent strength of the economy there. Longer-term growth forecasts also show an annual difference in growth between the markets in Central and Eastern Europe and the eurozone of up to 2 per cent.
As in the previous year, the insurance markets in the CEE region also benefited in 2018 from the positive economic conditions overall. According to the results currently available, premium volumes rose in Central and Eastern Europe (not including Russia) by around 4 per cent to an estimated €34 billion.
Demand for insurance products was particularly high once again in property insurance, where the strongest growth was achieved in CEE since the financial crisis at more than 8 per cent. With the exception of Romania, all markets in Central and Eastern Europe recorded a significant increase in premiums in 2018 in the non-life insurance sector. Stimulus for growth came in particular from the household and homeowner sectors as well as from the vehicle insurance lines. Higher vehicle inventories as a result of a significant rise in new registrations in particular led to substantial premium increases in the vehicle sectors. The exception to this was in Romania, where premium volumes fell in vehicle insurance as a whole, particularly as a result of price dumping by regional motor vehicle liability insurance providers, in addition to the difficult regulatory environment.
Developments in the life insurance markets in Central and Eastern Europe, on the other hand, were mixed. Aggregated premium volume fell again slightly in 2018 following solid growth in the previous year. This was mainly due to the negative performance of life insurance in Poland. As in previous years, the marked decline in business with short-term single premium products led to a decline overall in this line of business. Conversely, very high premium growth was recorded in countries where the life insurance business is still underdeveloped, such as in Croatia, Serbia and North Macedonia. The need for supplementary personal provision for private individuals remains high in these markets due to inadequacies in the state pension systems.
CEE remains a region with high growth potential for UNIQA, as can be seen from the positive performance in the insurance markets overall over the last few years. Higher incomes and increased consumer spending by private individuals also increase demand for insurance products. Many of the people living in the countries of Central and Eastern Europe remain uninsured or significantly underinsured.