The insurance year 2010 was much more positive than the previous year according to preliminary results from the Austrian Association of Insurance Companies (Versicherungsverband Österreich, VVO). The total premium volume of the Austrian insurance industry went up by about 2%. A large portion of the increase is due to the positive development in individual classes of property and casualty insurance as well as the great interest in single-premium policies.
It is unlikely that the life insurance market in 2011 will partake of the momentum of the previous year. The feared decline in the single-premium business is dampening expectations for premium income in the life insurance area in 2011.
In property and casualty, there are signs of a similar trend for 2011 compared with 2010, i.e., premium growth of around 2%.
In health insurance, no change in the business situation is expected. For 2011, a 2.8% increase in premium volume is predicted for this segment. Here, given the forecasted demographic development, including Austria, there should be a great need for nursing care insurance. But it has not been possible to raise Austrians’ awareness of this issue to the same extent as, for example, with respect to private pension plans.
In Swiss reinsurer Swiss Re’s review and outlook for the global insurance market, two different developments can be discerned for Central and Eastern Europe. While the direct non-life insurance business slightly declined in real terms in 2010, the life insurance segment experienced a strong upswing. High growth rates can be expected for coming years, especially in life insurance, but the non-life business should also increase in 2011 by about 4%, according to Swiss Re’s calculations.
The life insurance potential in the CEE region is still many times higher than in Western markets. The security provided by the state pension systems is usually much lower than in Western Europe. With the knowledge that one needs to make one’s own provisions for the future, demand is increasing for savings and life insurance products. This trend is growing stronger as income increases; the life insurance business is becoming more important. In the Czech Republic, in Slovakia, in Poland or in Hungary, life insurance is already playing a pivotal role; other countries will follow as their level of prosperity rises.
In the still young insurance markets, it is especially the non-life segment which presents possibilities for development. With one’s own car, the need first arises for motor vehicle insurance. In addition, companies in the region are starting to insure themselves against the multiple risks of their business activities. With increasing prosperity, the desire for a home of one’s own and the protection of the property one has acquired becomes more urgent. Demand for household and homeowner insurance increases.
Overall, it can be assumed that the insurance markets in Central and Eastern Europe will continue to grow more strongly than those in Western Europe. The convergence potential continues to be high throughout the region. The CEE region remains an economic area with a future.