According to information from the Austrian Insurance Association (Versicherungsverband Österreich - VVO), the Austrian insurance market grew by 2.5% in 2008. This moderate increase in premiums is based on a 3.5% increase from single-premium products, which most recently were showing a decline. Growth in premium income remained relatively stable, at 2.4%, when single-premium products are not included. Premiums in the non-life segment also experienced only moderate growth, 2.7%.
Given the expected economic downturn, VVO expects growth of only 1.8% in the property/casualty segment in 2009. Income growth is expected to slow from 3.5% to 3.1% in the health insurance segment.
Income from life insurance products with regular premiums is expected to increase slightly, by 2.8%, while the VVO expects a 5.0% decrease in premiums from single-premium products, stemming from the economic turbulence. As a result, growth for the life insurance segment as a whole is expected to be only 0.8%.
Growth for the Austrian insurance market as a whole is projected to be 1.5%.
Due to the strong economic catch-up process, insurance markets in the CEE region remain among the fastest growing markets worldwide. In spite of the projected economic slowdown, the growth in insurance markets can be expected to continue in 2009.
This view is also based, among other things, on past experience. These markets went through a difficult economic period just in the previous decade. Nonetheless, due to a burgeoning middle class, the CEE region displayed a rising demand for insurance services.
Because of their relative lack of maturity, the insurance markets of this region continue to be growth markets even today. The long-term catch-up potential can be seen from the insurance density in the region. Insurance density indicates the average annual amount each inhabitant of a country spends on insurance services. The CEE countries, for example, recorded an average insurance density of USD 273 in 2007, versus an average of USD 3,668 for the EU-15 countries.
Since it is generally expected that the CEE economies will be able to partially decouple themselves, as described above, from the trend in the EU-15 markets, and the need for insurance products is far from being covered, the coming years continue to hold out the promise of strong growth.