The Austrian insurance market is mainly categorized into three segments: life, non-life, and health insurance. Despite the recession and turmoil in financial markets, the Austrian insurance sector recorded a premium growth in all the three segments in 2009. Unit and index-linked life insurance products (“prämienbegünstigte Zukunftsvorsorge”) witnessed significant growth as compared to conventional life insurance policies due to the recovery of stock markets. Non-life segment grew on account of increasing demand for motor insurance premiums (including third party) and increase in natural hazards.
Although insurance penetration in Austria rose year-on-year in 2009, it is quite low as compared to other European nations such as Portugal, Ireland, Sweden and Belgium. The Austrian insurance market has become more concentrated in the recent past, mainly as a result of intense competition. In 2009, the leading eight life insurers accounted for about two-third of the market share with VIG being the largest domestic insurance group. Generali is the market leader in both P&C and motor segment.
According to Oesterreichische Nationalbank (OeNB), contribution of domestic demand to GDP growth is expected to turn positive in 2011. Moreover, improving external demand will bolster exports, which in turn will have a stimulating impact on investment. Factors such as demand for mandatory third-party car insurance (Haftpflichtversicherung), rising ageing population, rising healthcare treatment costs, growth in disposable income and restructuring of health insurance system in 2009 will also support the industry’s growth over the future years.