Business Monitor International


Lithuania Insurance Report

Published 12 November 2014

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Lithuania Insurance Report

BMI View: Lithuania ' s insurance sector has many strengths. However, the outlook, both over one and five years, is fairly uninspiring. As of late 2014, we see the strong sales in new business reported by some life insurers as being a one-off factor associated with Lithuania ' s adoption of the euro (and, therefore, 0% interest rates on bank deposits). The life insurance segment remains very under-developed by most metrics. Accordingly, we think that the main challenge - the low levels of income of most households - persists. This means that we still look for (low) single digit growth in life premiums through the forecast period. In the non-life segment (which is also under-developed) the main challenge is different, but should also result in sluggish premium growth. In spite of consolidation in the market, of which PZU ' s acquisition of Lietuvos Draudimas is the latest (and biggest) example, price competition will remain intense. 

The strengths of Lithuania's insurance sector are those of the multi-national companies that dominate it. These strengths, in no particular order, include: access to capital; strong brands; ability to innovate and to develop attractive new products; multi-channel distribution; and access to economies of scale that come from pan-European geographic footprints. Adoption of the EUR, with effect from January 1, 2015, will reinforce the stability of the economy and the financial system.

Total premiums across the sector as a whole are equivalent to about 1.6% of GDP or around USD260 per capita. The life segment accounts for just under one third of all activity; the non-life segment for a little over two-thirds. A life insurance sector that has the strengths which are evident in Lithuania, yet where life premiums are only about USD80 per capita, is almost invariably one where too many households are too poor to afford life insurance. In this respect, Lithuania is similar to a number of the poorer countries in Central and Eastern...

Table of Contents

BMI Industry View
7
SWOT
9
Political
10
Economic
11
Industry Forecast
12
Total Premiums Forecast
12
Table: Total Gross Premiums Written (Lithuania 2011-2018)
13
Total Claims
13
Table: Total Insurance Claims (Lithuania 2008-2013)
13
Insurers' Assets
14
Table: Total Insurance Assets (Lithuania 2006-2013)
14
Life Premiums Forecast
14
Life Premiums
14
Table: Gross Life Premiums Written (Lithuania 2011-2018)
15
Life Claims
16
Table: Life Insurance Claims (Lithuania 2008-2013)
16
Life Insurers' Assets
16
Table: Assets (Lithuania 2006-2013)
17
Insurance Drivers
17
Table: Insurance Key Drivers, Disease Adjusted Life Years (Lithuania 2011-2018)
17
Table: Insurance Key Drivers, Private Health Expenditure (Lithuania 2011-2018)
18
Non-Life Premiums Forecast
19
Non-Life Premiums
19
Table: Gross Non-Life Premiums Written (Lithuania 2011-2018)
20
Table: Non-Life Insurance Claims (Lithuania 2008-2013)
20
Non-Life Insurers' Assets
21
Table: Assets (Lithuania 2006-2013)
21
Non-Life Sub-Sector Forecast
22
Table: Non-Life % Breakdown (Lithuania 2011-2018)
23
Motor and Transport Insurance
23
Table: Motor Vehicle Insurance (Lithuania 2011-2018)
23
Table: Insurance Key Drivers, Autos (Lithuania 2011-2018)
24
Table: Transport Insurance (Lithuania 2011-2018)
25
Table: Insurance Key Drivers, Freight Tonnage (Lithuania 2011-2018)
25
Property Insurance
25
Table: Property Insurance (Lithuania 2011-2018)
26
Health Insurance
26
Table: Health Insurance (Lithuania 2011-2018)
26
General Liability and Credit Insurance
26
Table: General Liability Insurance (Lithuania 2011-2018)
27
Table: Credit/Financial Guarantee Insurance (Lithuania 2011-2018)
27
Industry Risk Reward Ratings
28
Central and Eastern European Risk/Reward Index
28
Table: Central And Eastern Europe Risk/Reward Index - Q1 2015
29
Market Overview
30
Life Market Overview
30
Table: Life Market Share, USDmn, 2008-2013
31
Table: Life Market Share (%), 2008-2013
32
Non-Life Market Overview
33
Table: Non-Life Market Share, USDmn, 2008-2013
35
Table: Non-Life Market Share (%), 2008-2013
35
Company Profile
37
Gjensidige Baltic
37
Lietuvos Draudimas
40
SEB Life & Pensions International
42
Swedbank Life Insurance
44
Demographic Forecast
47
Lithuania
47
Table: Lithuania's Population By Age Group, 1990-2020 ('000)
48
Table: Lithuania's Population By Age Group, 1990-2020 (% of total)
49
Table: Lithuania's Key Population Ratios, 1990-2020
50
Table: Lithuania's Rural And Urban Population, 1990-2020
50
Methodology
51
Industry Forecast Methodology
51
Risk/Reward Index Methodology
54
Table: Indicators
56
Table: Weighting of Indicators
57

The Lithuania Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's Lithuania Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Lithuanian insurance industry.

Key Benefits

  • Benchmark BMI's independent insurance industry forecasts for Lithuania to test other views - a key input for successful budgeting and strategic business planning in Lithuania's insurance market.
  • Target business opportunities and risks in Lithuania through our reviews of latest industry trends, regulatory changes and major deals, investments and macroeconomic developments.
  • Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts and views, covering the Life and Non-Life segments, the evolving competitive landscape and business operational risks.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the insurance sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2005-2014) and forecasts to end-2019 for key industry indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Life/non-life Premiums: Total premium growth (USDmn), premium growth (% y-o-y), penetration (% of GDP), density (USD per capita) for Life and Non-Life sectors, claims reinsurance, and assets and liabilities.
  • Non-life subsectors: Data on gross written premiums for all major Non-Life segments (motor, transport, property, personal accident, health, general liability and credit financial).

BMI’s Insurance Risk Reward Index

BMI’s Risk Reward Indices provide investors (Life and Non-Life) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Growth Drivers & Risk Management Projections

Key data and forecasts to end-2019 focusing on the growth drivers and downside risks to specific insurance lines including:

  • Population: Male/female, by age group, active/pensionable/youth population % of total, urban/rural population % of total.
  • Freight: Tonnage – air freight, rail freight, road freight, inland waterway.
  • Motor: Fleet size by type of vehicle % change y-o-y.
  • Epidemiology: Disease Adjusted Life Years and private health expenditure.

Market Overview & Rankings

Illustration of the insurance industry via rankings tables comparing gross written premiums by company (USDmn) and market share (%) for the top 20 players in both Life and Non-Life. This chapter also includes in-depth regional analysis of the market position, business strategies and investment potential of the leading insurance companies.

Sources

The insurance Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc