The Baltic states consist of the countries Estonia, Latvia and Lithuania.
The Baltic insurance market
The insurance market in the Baltic states is characterised by many companies that have their registered office in one of the three countries and also operate via branches in the other two markets. This leads to an above-average number of market participants. The five largest insurance groups in the Baltic states generated around 80% of the total premium volume.
With a premium increase of 6.6%, the Baltic states continued their positive development of recent years in the first nine months of 2019. The main contributions came from Lithuania and Latvia, which recorded similarly high growth rates (+7.9% and +8.0%, respectively). Premium volume rose 2.8% year-on-year in Estonia. With 47.5%, Lithuania generated close to half of the premium volume in the Baltic states.
Premium volume rose 6.6% in the non-life sector in the 1st to 3rd quarters of 2019. The biggest gain was recorded by the Latvian insurance market (+8.1%), followed by Lithuania (+7.6%) and Estonia (+3.3%).
Life insurance premium volume also rose in the first nine months of 2019, with a gain of 6.7%. Within the Baltic states Lithuania recorded the largest increase in life insurance premiums, with a gain of 8.5%, followed by Latvia (+7.5%) and Estonia (+0.5%).
The average per capita expenditure for insurance in Lithuania was EUR 313 in 2018. EUR 236 of this amount was for non-life insurance and EUR 77 for life insurance.
Estonia’s insurance density of EUR 418 per capita was higher than in Lithuania. EUR 351 of this amount was spent on non-life insurance and EUR 67 on life insurance. Latvia had the lowest insurance density in the Baltic states, namely EUR 284. EUR 224 was for the non-life sector and EUR 60 for the life sector.
VIG companies in the Baltic states
VIG insurance companies are represented in all three Baltic states. Compensa Life and Seesam have their headquaters in Estonia. Both insurance companies are also represented by branches in Latvia and Lithuania. BTA Baltic operates in Latvia and has branches in Estonia and Lithuania. Compensa Non-Life operates in Lithuania. It maintains branches in Latvia and Estonia.
With a market share of 24.4% the VIG insurance companies are number one in the Baltic states. They also hold first place in the non-life sector and third place for life insurance.
Financial performance indicators in the Baltic states segment
Premiums written in the Baltic states segment rose to EUR 500.3 in 2019 (2018: EUR 375.8 million). The significant 33.1% year-on-year increase in premiums was mainly due to first-time consolidation of the insurance company Seesam and generally positive performance in all lines of business. Net earned premiums rose to EUR 385.2 million in 2019 (2018: EUR 277.1 million).
Result before taxes
The result before taxes of EUR 7.7 million recorded in the Baltic states segment in 2019 could be increased compared to the previous year (2018: EUR 2.1 million). The development was mainly due to improvements in the combined ratio and a better financial result.
The combined ratio improved compared to the previous year to 97.7%, mainly due to lower claims ratios in motor third party liability and other property and casualty insurance (2018: 98.7%)