Latvia Insurance Report Q2 2016
BMI View: Latvia's insurance sector is one of the smaller markets in Central and Eastern Europe, andcertain lines such as life insurance remain extremely under-developed. A lack of household spending powerand a general lack of awareness of the benefits of certain insurance products have restricted spending.
However, the growing influence of multinational insurance firms on the market is leading to advances inproduct innovation and distribution strategies which are leading to increased take-up of life insurance andother products. We also note the positive effects of Latvia's strengthening economy which is boostingdisposable household incomes and consumer spending. These factors are likely to see increasing foreigninterest in the country's insurance market following recent acquisitions from the likes of PZU and ViennaInsurance Group.
Key Updates And Forecasts
Latvia's life insurance sector will be the better performing of the two core markets we monitor, with acombination of robust economic growth and consumer sentiment and the increasing awareness of thebenefits of life insurance products driving growth. Life premiums will grow by 10.3% a year in USDterms and 8.3% in EUR terms through the forecast period, reaching USD770mn (EUR642mn) in 2020.
Growth in non-life premiums will be more moderate due to a higher level of existing penetration andprice competition in key lines such as motor insurance. We forecast total non-life premiums to grow by6.8% and 4.9% in USD and EUR terms respectively through to 2010, reaching USD500mn(EUR416mn).
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