The long-term growth and convergence potential of the CEE region can be clearly shown using insurance density. Insurance density is an important indicator of the state of development of a country’s insurance sector that shows the average amount that each inhabitant of a country spends each year for insurance services.

Overall market

The convergence potential of the CEE countries becomes clearly apparent if the insurance density of these countries is compared to that of the EU-15 countries. While the CEE countries recorded an average insurance density of USD 365 in 2008 (2007: USD 273), the average in the EU-15 countries was USD 3,727 (2007: USD 3,668).

The growth in total premium income of 33.7% recorded in the CEE region accordingly illustrates the growth potential of Central and Eastern Europe when compared to the moderate growth (1.6%) in the EU-15 countries.

Non-life insurance

The insurance densities for non-life insurance in the CEE region and EU-15 countries are USD 204 (2007: USD 164) and USD 1,362 (2007: USD 1,292), respectively. This means that the insurance density for this sector rose a remarkable 24.4% in the CEE region, while non-life insurance in the EU-15 countries only recorded an increase of 5.4%.

Life insurance

Insurance density in the life insurance sector is currently USD 161 (2007: USD 109) in the CEE region versus USD 2,365 (2007: USD 2,376) in the EU-15 countries. These figures clearly show that the growth and convergence potential in the CEE region is even greater in the life insurance sector than the non-life sector.

Although starting from a smaller base, life insurance premiums still rose by almost 50% in the CEE region, while the EU-15 countries even posted a slight decline.

2008 insurance density: long-term growth potential in the CEE markets (bar chart)