Estonia Insurance Report 2011
Business Monitor International, November 2010, Pages: 44
The Estonia Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Estonia's insurance industry.
Estonia’s insurance sector has had to cope with the brutal recession in the wake of the global financial crisis of late 2008, but should begin to grow again from 2011.
The Finansinpektioon, Estonia’s financial regulator, noted in late 2010, that non-life premiums in H110 amounted to EEK1,850mn, or about 12% less than in H109. Premiums were lower in virtually all non-life lines. The largest absolute fall was in premiums for ‘land vehicle insurance’ – presumably voluntary insurance or CASCO, which dropped from EEK757mn in H109 to EEK622mn in H110. Even premiums for compulsory motor third party liability (CMTPL) insurance slumped from EEK573mn to EEK499mn. Economic conditions are hitting hard. One measure of the challenges is that claims for financial loss insurance soared from EEK26mn in H109 to EEK176mn in H110. The main players in the life segment remain subsidiaries of large foreign groups: If P&C, a non-life offshoot of Finland’s Sampo, ERGO, the local arm of Munich Re’s direct insurance operation and Swedbank. Together, these three companies account for nearly two-thirds of premiums.
In H110, life premiums rose by nearly 10% to EEK618mn. The regulator notes that unit-linked premiums increased by 31%.Unit-linked business generated total premiums in H110 of EEK315mn. Endowment products generated premiums of EEK183mn, or a little less than the EEK206mn of the previous corresponding period. Pension insurance premiums remained more or less unchanged at about EEK40mn. By the end of June 2010, there were 208,221 life insurance contracts, about 8,000 fewer than there had been a year previously. Except for term and whole-of-life insurance, where the number of contracts increased from 57,630 to 62,855, the number of contracts decreased in all lines. Swedbank and Mandatum, the local offshoots of the eponymous Swedish bank and Sampo respectively, accounted for 35% and 30% of life premiums in H110. The third largest player was the local life operation of Sweden’s SEB, with a market share of 23%.
We believe the worst of the Estonian recession is over, with further sharp contractions in economic output not expected. That said, while the economy is unlikely to contract after H210, this does not mean that we expect a rapid recovery. The ‘internal devaluation’ process in Estonia will mean that key real sector indicators for the labour market, industrial sector, construction and domestic credit will remain weighed down and well off their peak highs through the long term. We do not expect the Estonian economy to return to its 2008 size in nominal euro terms until 2014.
We stress, however, that while the worst of the contraction is over, a sharp and robust fundamental recovery is by no means the core scenario either. Our long-term growth forecast is for Estonian economic growth to average just 3.1% over 2011-2014, a far cry from the 8.5% average in the five-year period before the global financial crisis.
Key Features Of This Report
The structure of this report is substantially similar to that of its predecessors. We have updated comments and data, using information made available by regulators, trade associations and insurance companies over the course of 2010.
Sector At A Glance
Table: The Estonian Insurance Sector At A Glance
Key Insights On Estonia’s Insurance Sector
Key Features Of This Report
SWOT Analysis
Estonia Insurance SWOT
Estonia Political SWOT
Estonia Economic SWOT
Estonia Business Environment SWOT
Central And Eastern European Markets Overview
Table: Non-Life Segment Premiums In Central And Eastern Europe
Table: Life Segment Premiums In Central And Eastern Europe
Projections And Forecasts
Table: Insurance Data And Projections, 2007-2015
Projections And Drivers Of Growth
Table: Growth Drivers, 2007-2015
Country Update
Macroeconomic Outlook
Table: Estonia – Economic Activity, 2005-2014
Political Outlook
Insurance Business Environment Rating
Table: Estonia’s Insurance Business Environment
Table: Central And Eastern Europe Insurance Business Environment Ratings
Regional Context
Table: Non-Life Premiums In A Regional Context, 2009
Table: Life Premiums In A Regional Context, 2009
Analysis Of Competitive Conditions
Table: Largest Non-Life Players – Market Share, H110 (%)
Table: Largest Life Players – Market Share, H110 (%)
Company Profiles
ERGO
QBE
RSA
Vienna Insurance Group
Country Snapshot: Estonia Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2004
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
BMI Methodology
Insurance Business Environment Ratings
Table: Insurance Business Environment Indicators And Rationale
Table: Weighting Of Indicators
-ERGO
-QBE
-RSA
-Vienna Insurance Group
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