Taxes, investment in treasury bonds and the feeling of security – insurance positively affects Poland and Poles

Date: 14 March 2023

IN 2021, THE SHARE OF INSURERS IN POLAND’S GDP WAS 2.25%, WHICH MEANS NEARLY 59 BILLION ZLOTYS OF ADDED VALUE IN THE ECONOMY. THE SECTOR PROVIDES 221,000 JOBS. INSURANCE COMPANIES ARE THE SECOND BIGGEST DOMESTIC COMMERCIAL INVESTOR ON THE BONDS MARKET. THEY PAID A TOTAL OF PLN 1.9 BILLION IN TAXES TO THE POLISH ECONOMY. EACH DAY, INSURERS ADJUSTED 20.5 THOUSAND PROPERTY DAMAGE, 5.5 THOUSAND OF WHICH WAS MOTOR DAMAGE. THE POLISH CHAMBER OF INSURANCE PUBLISHED THE SECOND EDITION OF THE REPORT ENTITLED ‘INFLUENCE OF THE INSURANCE INDUSTRY ON THE POLISH ECONOMY AND COMMUNITY’, WHICH PRESENTS WAYS IN WHICH INSURANCE HELPS POLES.

The influence of insurance on Poland, Poles and the economy primarily consists of providing security by payouts of compensation and insurance benefits. It also encompasses participation in developing the industry and trade, providing jobs, and facilitating access to medical services.

KEY FIGURES:
  • 72 % of Poles trust insurers[1].
  • PLN 41.3 billion – this much insurers paid out in compensations and benefits in 2021.
  • This translates into PLN 1,086 per inhabitant of Poland, of which PLN 485 were benefits under life insurance, and PLN 418 under motor insurance (third party liability plus motor hull insurance).
  • 4 million insurance agreements concluded, including 29.8 million of motor third-party liability insurance, 8.1 million of motor hull insurance, and 13.9 million insurance policies for apartments and summer houses. Life insurance was held by 23.5 million people, of which 12.2 million under group insurance policies.
  • In 2021, the number of property insurance policies increased by over 4%.
  • In 2021, Poles spent PLN 69.2 billion on insurance.
  • 5 million – this is the value of damages adjusted by insurance companies in 2021 in Poland. This means 20,000 events daily.
  • 25 percent – the shares of insurers in Poland’s GDP in 2021.
  • 5 thousand – the number of jobs provided by insurers.
  • The share of the Polish market in the premiums written of the region of Central and Eastern Europe was 37% in 2020 and 2021.
  • Insurance companies were the second largest domestic commercial investor on the treasury bonds market at the end of 2021.
  • In 2021 alone, insurance companies paid PLN 1.2 billion of income tax and an estimated 650 million of tax on assets. This means that nearly PLN 2 billion was paid to the Polish economy.
  • 3,500 employees of insurance companies are involved in community life by their voluntary activities.
STRENGTH OF THE INSURANCE MARKET IN POLAND

Insurers provide jobs for 221,500 people, on a direct, indirect or induced basis. This means that in other sectors of the economy there are seven FTEs per each FTE in the insurance industry. They also remit payments to the budget as taxpayers and treasury bond buyers. In 2021, insurance companies paid PLN 1.2 billion in income tax and the estimated 650 million in tax on assets. They invested nearly PLN 56 billion in treasury bonds issued on the domestic market.

“Insurance companies are the second largest domestic commercial investor on the bonds market, and Poland is the biggest insurance market in Central and Eastern Europe. It bears emphasis that although the share of insurance in GDP of the EU countries went down over the last 10 years, Poland recorded its increase during the same period. These funds were paid to the economy to support the development of education, transport, culture and security”, said Jan Grzegorz Prądzyński, President of the Management Board of the Polish Chamber of Insurance.

“We are a strong and stable sector which guarantees economic growth. Insurers reduce uncertainty, which is not conducive to growth. Poles want to get insured and appreciate the help offered by insurers in adverse circumstances. They are most likely to insure their assets – we have e.g. about 60-70 percent houses and flats insured. Life insurance is the second major part of the market. Such policies account for 32% of the aggregate premiums. Protection was afforded to 23.5 million people”, adds Grzegorz Prądzyński.

Insurance fulfills its function – it protects the life, health and property of Poles. The Polish market is the biggest in Central and Eastern Europe.

“Insurance in Poland has the effect of stabilising both the Polish economy and the Polish society. There are few sectors of the economy that, like insurance, are essential for those who are professionally bound with it, and for all Poles who insure their property and life”, concludes Marcin Krzykowski of Milliman consulting firm, which prepared the report at the request of PIU. “This is why it’s important to be aware of the actual scale of insurance presence in our lives, expressed in the number of policies and adjusted damage, as well as the amount of compensations and benefits paid out. The report shows transparently and clearly that modern society and modern economy cannot exist without the insurance industry, because each decision and action carries a risk which needs to be taken to grow and develop. Insurance is aimed at mitigating the effects of this risk”.

INSURERS HELP – SOCIAL RESPONSIBILITY OF INSURERS

The report published by PIU also describes the community involvement of insurers in Poland, who additionally support public medical establishments, the police, fire and rescue services. They also organise community campaigns promoting safety on the roads, by water or in the mountains. The total funds intended for this purpose, including prevention and sponsorship funds, exceeded PLN 127 million in 2021 and reached 10 million people.

The report is available at the website of PIU.

[1] Survey of insurance sector reputation in Poland carried out for PIU on 4-18 March 2022 using a sample of 1,500 respondents.