Measured by gross written premium in the first three quarters of 2019, the non-life insurance market in Poland grew by a total of PLN 1,192 million (+4.0%) compared to the corresponding period of the previous year.
Within motor insurance, the gross written premium in motor TPL, which is the most sizable part of the non-life insurance market in Poland (PLN 12.2bn, or 39,1% of total non-life market in first three quarters of 2019) increased by 0.4% y/y (by PLN 44 million). Within that figure, a decline was visible in motor TPL in direct activity (down PLN 149 million, -1.3% y/y), which was offset by higher premiums from indirect activity (a growth of PLN 193 million, +27.1% y/y).
The gradually declining dynamics of premium growth in motor TPL resulted from intensified price movements among competitors after a period of above-average profitability of the portfolio. On the other hand, growth of sales in motor own damage insurance grew was 5.0% y/y (or PLN 307 million) and contributed the most to the market increase in the period.
In non-motor insurance, general TPL insurance (up PLN 167 million, +10.0%) and assistance (up PLN 105 million, +12.2%) made the most positive contribution to the overall insurance market’s growth. A decline in premium was observable only in legal protection insurance (down PLN 20 million, -24.8%).
In the first three quarters of 2019, the overall non-life insurance market generated a net result of PLN 3,930 million, up PLN 231 y/y. Excluding the dividend from PZU Życie, net profit of the non-life insurance market increased PLN 156 million (6.4%).
In the first three quarters of 2019, the technical result of the non-life insurance market fell PLN 255 million to PLN 2,116 million. The fall in the technical result in insurance against fire and other damage to property of PLN 324 million (as an effect of an increase in claims and benefits paid more than offsetting the growth in earned premium) and motor own damage insurance of PLN 260 million, offset by a PLN 302 million increase in motor TPL, had the largest impact on this change.
The movement in the technical result in the motor insurance group resulted from a combined effect of a higher earned premium (up by PLN 790 million, +5.2%) and an increase in the loss ratio of the motor own damage portfolio.
|Gross written premium vs. technical result||1 January - 30 September 2018||1 January – 30 September 2019|
|PZU*||Market||Market net of PZU||PZU*||Market||Market net of PZU|
|Gross written premium||10 735||29 893||19 157||10 482||31 084||20 602|
|Technical result||1 306||2 371||1 065||1,016||2 116||1,100|
The following entities in the PZU Group operate on the non-life insurance market in Poland: the Group’s parent company, i.e. PZU, along with LINK4 and TUW PZUW.
To respond to client expectations in recent years, the PZU Group has been consistently extending its offering for retail and corporate clients, thereby sustaining its high market share.
In the first three quarters of 2019, the PZU Group had a 33.7% share in the non-life insurance market, compared to 35.9% in the corresponding period of 2018 (33.2% and 34.8% on direct activity, respectively), thereby recording a slight dip while retaining the portfolio’s profitability well above market average.
In the first three quarters of 2019, the PZU Group’s technical result (PZU together with LINK4 and TUW PZUW) stated as a percentage of the overall market’s technical result was 48.0% (the PZU Group’s technical result was PLN 1,016 million while the overall market’s technical result was PLN 2,116 million).
The total value of the investments made by non-life insurance companies at the end of Q3 2019 (excluding the investments made by their subsidiaries) was PLN 59,959 million, up 1.2% compared to the end of 2018.
The non-life insurance companies in total estimated their net technical provisions at PLN 55,582 million, up 4.8% versus the end of 2018.
As the PZU Group’s parent company, PZU offers an extensive array of non-life insurance products, including motor insurance, property insurance, casualty insurance, agricultural insurance and third party liability insurance. At yearend 2019, motor insurance was the most important group of products offered by PZU, both in terms of the number of insurance agreements and its premium stated as a percentage of total gross written premium.
Faced with changing market conditions, PZU realigned its offer in 2019 to clients’ evolving interests and needs by rolling out new products and innovative solutions.
In mass insurance, PZU did the following:
Most of the changes in the corporate insurance segment called for enhancing the effectiveness of collaboration with intermediaries and making the dedicated offer for car fleet clients and leasing companies more attractive. The most important activities related to the product offering were as follows:
In financial insurance, PZU was unswerving in its support for the Polish economy by providing insurance guarantees and securing the performance of contracts in such key areas as the power sector, the shipbuilding industry, the construction industry and the science and innovation sector. At the same time, in the area of portfolio insurance (financial loss under GAP), PZU expanded its cooperation by including new partners, including lease companies.
In 2019, PZU cooperated with 9 banks and 11 strategic partners. PZU’s business partners are leaders in their industries and they have client bases with enormous potential offering an opportunity to extend the offering to include more innovative products. PZU cooperates actively with the PZU Group’s member banks, continuing the roll-out of a comprehensive offering using the banks’ distribution networks. This cooperation with Pekao and Alior Bank allows PZU to gradually expand the offering and scale of sales of insurance products linked to bank products, including insurance coverage for cash loans and mortgage loans.
In strategic partnerships, cooperation was based mostly on companies operating in the telecom and power sectors through which insurance for electronic equipment and assistance services were offered, e.g. the assistance of an electrician or a plumber. PZU’s insurance offering is also present on the e-commerce market through cooperation with Allegro and PLL LOT.
LINK4 entered the Polish insurance market as the first company offering products by phone; it still continues to be one of the leaders on the direct insurance market. It is extending its cooperation with multi-agencies, banks and strategic partners. The company offers an extensive array of non-life insurance products, including motor insurance, property insurance, casualty insurance and third party liability insurance. The company focuses predominantly on the development of innovative solutions providing added value to its clients and business partners. By using new technologies in internal processes and in relations with clients, the company continues to challenge the thinking of insurance. This was recognized by the jury of the Leaders of the Banking and Insurance World contest, which awarded LINK4 the title of the Best Digital Insurer of 2018. At the end of 2019, the company had in place 36 business processes executed fully or largely by robots.
In 2019, the company focused on expanding further its current product offering by adapting it to the changing expectations of its clients and business partners. The most important activities associated with modifying its product offering were as follows:
TUW PZUW’s activity
2019 was another historic record-breaking year for TUW PZUW in terms of both sales and profitability.
The company offers its clients flexible insurance programs that optimize both costs and coverage. Since 2016, it has been selling and handling commercial insurance products targeted at clients from various industries, focusing predominantly on cooperation with large enterprises, medical centers (hospitals and clinics), local government units and church entities.
The company continues to experience a rapid increase in the number of its members, currently standing at over 380. In 2019, the largest rate of increase in the number of members was recorded among church institutions. Within the framework of TUW PZUW, 48 mutual benefit societies were established, bringing together members that fulfill specific criteria (industrial, corporate, in terms of risk types).
In 2019, the company continued to improve its product offering by modifying existing products and expanding its offering, for instance with a health insurance bundle. While attuning its operating model to the scale of business, the company keeps expanding its team of professionals to ensure the provision of comprehensive insurance services to its members and the capacity to tailor its insurance offering to the specific needs of clients.
The dynamic growth and performance in 2017 resulted in TUW Polski Zakład Ubezpieczeń Wzajemnych being noticed on the international market when it was added to the list of largest mutual insurance companies in the world. According to the Global 500 report prepared by the International Cooperative and Mutual Insurance Federation (ICMIF) and published in 2019, TUW Polski Zakład Ubezpieczeń Wzajemnych is the second fastest growing mutual insurance company in the world, ranking 471st in the ranking of 500 largest cooperative and mutual insurance companies in the world.
Factors, including threats and risks, that will affect the operations of the non-life insurance sector in 2020
Besides chance events (such as floods, droughts and spring ground frost), the following should be treated as the main factors that may affect the situation of the non-life insurance sector in 2020: