Insurers paid out almost PLN 20 billion worth of compensation

Date: 16 September 2021

IN THE FIRST HALF OF 2021, INSURERS PAID OUT 19.9 BILLION WORTH OF INSURANCE COMPENSATION AND BENEFITS – ACCORDING TO POLISH CHAMBER OF INSURANCE (PIU) DATA. PAYMENTS FROM LIFE PROTECTION INSURANCE INCREASED THE MOST. THIS IS A RESULT OF HIGHER MORTALITY DUE TO THE PANDEMIC.

Insurers paid out almost PLN 20 billion worth of compensation – Key figures:

  • Insurers paid out PLN 19.9 billion worth of compensation, including:
    • PLN 9.3 billion from life insurance (including: 34% higher payments from protection insurance).
    • PLN 7.4 billion from motor insurance (third-party liability insurance + motor hull insurance).
    • About PLN 3.2 billion from other insurance.
  • Poles spent PLN 34.4 billion on insurance (gross premiums written), 9% more than a year before.
  • Insurers invested nearly PLN 86.4 billion worth of assets in domestic bonds and other fixed-income securities supporting the economy and public finance.
  • Almost PLN 18.2 billion worth of assets were invested in shares of WSE companies and other variable-income securities
  • Insurers paid more than PLN 665 million in income tax.
LIFE INSURANCE

In the life market, an increase in benefits from protection insurance is mainly visible.
– ‘The first half of 2021 in insurance reflects the tragic consequences of the pandemic. Benefits from protection life insurance
reached almost PLN 4 billion, compared to PLN 2.9 billion a year earlier’, says Jan Grzegorz Prądzyński, President of the Management Board of PIU.

In addition to the increase in benefits, premiums are also rising in life insurance, which indicates increased interest in these products. In total, life insurance premiums amounted to PLN 11 billion, 9% more than in the previous year. Premiums from protection life insurance alone increased by 13.7%, to PLN 4.4 billion. An increase in sales can also be seen in accident and sickness insurance (an increase of 6.3%, to almost PLN 3.5 billion).

PROPERTY INSURANCE

As far as property insurance is concerned, motor insurance accounts for the largest share of compensation payments. Its value in the first half of the year was slightly higher than in the same period last year:

  • Compensation and benefits from compulsory motor third-party liability insurance amounted to PLN 4.6 billion and were 1.8% higher than a year before.
  • Compensation from motor hull insurance amounted to PLN 2.8 billion, 4.7% more than a year before.
  • In the first half of 2021, the average premium for compulsory motor third-party liability insurance was PLN 488, i.e. 1.2% less than a year before. At the same time, the average claim increased. Its cost amounted to PLN 8337, 8.1% more than a year before.

– ‘An excessive decrease in rates with a simultaneous increase in the average claim is not beneficial either for the industry or for clients. We experienced a similar phenomenon a few years ago, which resulted in significant price increases that aroused public opposition’, says Jan Grzegorz Prądzyński.

The first half of 2021 did not bring major losses in terms of weather-related damage. Compensation related to natural elements and other property damage amounted to PLN 1.3 billion, 9.8% less than a year before.
– ‘The results after the first half of this year do not change the fact that we will be facing violent weather events with increasing frequency. We are not able to avoid them, but we can protect ourselves against them financially thanks to insurance’, says Andrzej Maciążek, Vice-President of the Management Board of PIU.

PROFIT AFTER THE FIRST HALF OF 2021

At the end of June 2021, insurers paid PLN 665 million of income tax to the State budget. During this period, they earned net profit of PLN 2.7 billion, i.e. 29% less than in the previous year. This is primarily due to a lower technical result in life insurance.