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Latvia Insurance Report 2012
Business Monitor International, Oct 2011, Pages: 52
Business Monitor International's Latvia Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Latvia's insurance industry.
Latvia’s insurance sector is – and will remain – small by any standard. In part because of the dislocations suffered by the economy over the last three years, premiums are about the same as they were in 2005 and 2006. At the time of writing, in early October 2011, BMI is looking for life premiums to track sideways for this year as a whole, but for non-life premiums to rise by a quarter. If these forecasts are changed, it will likely be in a downward direction.
The non-life segment is dominated by motor-related lines and property insurance. Premiums are down – quite sharply – in all three of these relative to the end of 2008. The latest data indicates that these lines are recovering – but not as fast as they might. There has been brutal pricing competition in a crowded market place, with the result that the non-life segment as a whole lost money in H111. All players either lost money in the first six months of this year or suffered a significant drop in profit relative to H110. BMI would not be surprised if some of the smaller companies rethink their commitment to the Latvian non-life segment.
By at least one measure, the life segment barely exists. The numbers of lives covered fell over the two years to the end of 2010. Accident insurance is the line within the life segment with the largest number of lives covered – around 129,000 in a country with a total population of over 2.2mn.
Nearly all of the life premiums written in Latvia are accounted for by the local branches or subsidiaries of very large, very well-capitalised and very well regulated multi-nationals with footprints across Nordic or Central and Eastern Europe. BMI cannot believe that the problem is one of a lack of trust. Rather, BMI suspects that most households are too poor to use life insurance or do not understand the benefits that it offers.
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