Effects will continue to be felt in the Austrian insurance industry in the coming year. According to the most recent projections of the Austrian Association of Insurance Companies (Verband der Versicherungsunternehmen Österreichs - VVO), the Austrian insurance market recorded a decline in 2009. Due to the effects of the downturn in the Austrian economy, the market is expected to experience a further decline in total premiums in 2010.
In the life insurance area, the latest expert projections forecast a further 3% decrease in premiums for 2010 as a whole.
Premium volume is also expected to decline in the property/casualty area due to the troubled economic situation. In 2010, a decline of 0.5% in premium volume is expected in this area.
Health insurance is likely to continue to grow, as it does every year. The latest projections from VVO predict a moderate increase of 2.5% in health insurance premiums.
Due to the increasingly competitive environment in the Austrian insurance market, the current focus on advice and service will become even more important for insurance companies in the future.
Due to the strong economic convergence process, insurance markets in the CEE region continue to offer high growth potential. In spite of the predicted economic slowdown, the growth in insurance markets can be expected to continue in 2010.
Demand for insurance services exists primarily in the motor and industrial segments. Consumers whose wealth is increasing first invest in a car. This means they need motor liability insurance or, in the case of lease financing, additional coverage in the form of a motor own-damage policy. A further increase in wealth leads to further investments in a home or a flat of one's own, which increases the importance of household and homeowner insurance. As disposable income increases further, savings and investment products in the form of life insurance policies become more important in addition to the basic insurance mentioned above.
Life insurance already plays an important role in countries like the Czech Republic, Slovakia, Poland and Hungary in particular.
This insurance segment offers even more convergence potential in the CEE countries than non-life insurance. The growth in health insurance depends on the degree of liberalisation in the different markets and on a certain level of prosperity.
Since it is generally expected that the CEE economies will be able to partially decouple themselves 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.