Latvia Insurance Report 2013
Business Monitor International, November 2012, Pages: 78
Key Insights And Key Risks
Conditions remain fairly challenging in Latvia’s insurance sector. The life sector is chronically underdeveloped – apparently because Latvians who are able to afford life insurance do not understand its benefits. In early 2012, the regulator intervened to close LKB Life, an affiliate of Latvijas Krajbanka,
which had collapsed in November 2011. Although the life insurance company is able to meet its obligations to policyholders, this episode probably would not have helped public perceptions of life insurance. In fact, one of the strengths of the segment (like its counterparts in Lithuania and Estonia) is that is dominated by subsidiaries of very strong multinationals such as SEB Life & Pensions International, Swedbank Life Insurance, ERGO and Mandatum Life.
Meanwhile, Latvian non-life insurers have been escaping the stagnation (or worse) of premiums in their segment by expanding (aggressively) into Estonia and Lithuania. The limited data available to us as of September 2012 suggests that they have exchanged cutthroat competition in motor related lines
(especially) at home for the same in Estonia (if not in Lithuania). The regulator notes that, collectively,
Latvia’s non-life companies were well capitalised through 2011. However, a number of the companies
(and indeed, entire lines) were unprofitable.
In this report we have incorporated:
- BMI’s latest forecasts for the Latvian economy.
- Official data, published by the regulator in relation to developments in the sector through H112.
- Comments from several of the leading players in relation to conditions in late 2011 and H112.
Executive Summary 5
Table: Total Premiums 2010-2017 5
Key Insights And Key Risks 5
SWOT Analysis 7
Latvia Insurance Industry SWOT 7
Latvia Political SWOT 8
Latvia Economic SWOT 8
Latvia Business Environment SWOT 9
Life Sector Overview 10
Central And Eastern Europe Life Sector Overview 10
Table: Central And Eastern European Life Premiums, 2010-2017 (US$mn) 10
Latvia Life Sector Update 13
Life Industry Forecast Scenario 14
Table: Life Premiums, 2010-2017 14
Growth Drivers And Risk Management Projections 15
Population 15
Table: Insurance Key Drivers, Demographics 2010-2017 15
Non-Life Sector Overview 17
Central And Eastern Europe Non-Life Sector Overview 17
Table: Central And Eastern European Non-Life Premiums, 2010-2017 (US$mn) 17
Latvia Non-Life Sector Update 20
Non- Life Industry Forecast Scenario 21
Table: Non-Life Premiums, 2010-2017 21
Growth Drivers And Risk Management Projections 22
Macroeconomic Outlook 22
Table: Latvia Macroeconomic Data And Forecasts 2010-2017 24
Political Stability Outlook 25
Healthcare 27
Epidemiology 28
Table: Latvia Insurance Key Drivers – Disease Adjusted Life Years, 2010-2017 29
Insurance Risk/Reward Ratings 31
Table: Latvia’s Insurance Risk/Reward Ratings 31
Table: Central And Eastern Europe Insurance Risk/Reward Ratings 32
Competitive Landscape 33
Competitive Landscape Analysis 33
Major Players In Latvia’s Insurance Sector 34
Company Profiles 36
Balta 36
Baltikums 38
BTA Insurance Company SE 40
ERGO 42
Gjensidige Baltic 45
MetLife ALICO 47
Powszechny Zaklad Ubezpieczen (PZU) 50
RSA 54
Sampo Group (P&C and Mandatum Life) 57
SEB Life & Pension International 60
Seesam 62
Swedbank Life Insurance 64
Vienna Insurance Group 66
Demographic Outlook 70
Latvia's Population By Age Group, 1990-2020 ('000) 71
Latvia's Population By Age Group, 1990-2020 (% of total) 72
Latvia's Key Population Ratios, 1990-2020 73
Latvia's Rural And Urban Population, 1990-2020 73
BMI Methodology 74
Insurance Risk/Reward Ratings 75
Table: Insurance Risk/Reward Indicators And Rationale 76
Table: Weighting Of Indicators 77
Company Profiles
Balta
Baltikums
BTA Insurance Company SE
ERGO
Gjensidige Baltic
MetLife ALICO
Powszechny Zaklad Ubezpieczen (PZU)
RSA
Sampo Group (P&C and Mandatum Life)
SEB Life & Pension International
Seesam
Swedbank Life Insurance
Vienna Insurance Group
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