Czech Republic Insurance Report Q3 2012

The Czech Republic Insurance Report considers the prospects for both life and non-life insurers in that country. The latest statistics from the regulator and comments from leading companies that are active in the Czech Republic indicate that, in both of the main segments, premiums tracked sideways during 2011.

Total non-life premiums were suppressed by ongoing price competition in both compulsory motorists third-party liability (CMTPL) and voluntary auto (CASCO) insurance. However, life insurance continues to grow.

The Czech Republic is a rare example of a (moderately) high income country where life insurance is clearly emerging as an important channel for organised savings. Customers value life insurance, can afford it, and have relatively few alternatives (particularly given the current environment of low interest rates). The market is dominated by large and sophisticated multinationals that are well capitalised, can derive economies of scale from their European (if not global) operations, have strong brands and work through multiple distribution channels. Premiums for single paid life insurance policies that are linked with existing policies have been surging.

Thanks to past deal making, VIG and Generali, through their various subsidiaries, dominate the non-life and the life segments. However, the rankings of the other insurers are far from static. It is quite possible that we will see new arrivals to, mergers within or departures from both of the two major segments. The comments from the majors in relation to their performance through 2011 indicate that they have been competing significantly (and successfully) through the development of new products and services.

Over the last quarter, BMI has made the following changes:

The trade association’s statistics for 2011, which were published in Q112, have been incorporated into the analysis.

There is a discussion of the results for last year that were released by the major insurance companies during Q112.

The analysis takes into account BMI’s latest assessment an economic environment that remains moderately challenging.