“The result of the previous year is almost record high – higher profits were only earned in 2007. The results varied significantly across insurance branches though – the return on the insurance activity within non-life insurance was almost 6 times lower than that of life assurance undertakings,” says Mindaugas Salcius, Deputy Director of the Prudential Supervision Department of the Supervision Service at the Bank of Lithuania.
Intense competition triggered the decline in non-life insurance tariffs; as a result, the non-life insurance sector, which started the year with strong growth (the amount of its premiums written grew by 8.1 percent in Q1), in subsequent months decelerated its pace, while the total increase for the whole year was a mere 1 percent. The premiums written within non-life insurance stood at EUR 385.8 million (LTL 1,332.1 million). The premiums written within the life assurance sector grew much faster – by 18.6 percent, to EUR 215 million (LTL 742.5 million).
The insurance undertakings registered in Lithuania and the branches of insurance undertakings of other EU countries established in Lithuania, according to the revised data, wrote insurance premiums amounting to EUR 600.9 million (LTL 2,074.6 million), while the growth rate of the entire insurance market in 2014 was 6.6 percent.
Over 2014, insurers paid EUR 316.4 million (LTL 1,092.4 million) of claims, a year-on-year increase of 1.5 percent. The amount of life assurance claims paid was EUR 95 million (LTL 327.9 million), a decrease of 1.7 percent year-on-year. The claims paid within the non-life insurance sector increased by 2.9 percent, to EUR 221.4 million (LTL 764.4 million).
The profits of insurance undertakings from the insurance activity last year amounted to EUR 14.4 million (LTL 49.7 million); the result of the investing activity is EUR 11.9 million (LTL 41 million). The operations of all undertakings were profitable, except for two non-life insurance undertakings.
At the end of 2014, the assets of insurance undertakings stood at EUR 1,024 billion (LTL 3.534 billion), an increase of 19 percent year-on-year. Such increase in their assets was due to investment by the Polish insurance undertaking PZU S.A. in UAB DK PZU Lietuva, which acquired the branch of Denmark’s insurance company Codan Forsikring A/S in Estonia.
The year 2014 saw changes in the structure of shareholders of insurance undertakings. The shares of AB Lietuvos Draudimas were acquired from the UK insurance company Royal & Sun Alliance Insurance by PZU S.A. This undertaking later announced about its intention to sell UAB DK PZU Lietuva to the Kingdom of Norway’s insurance company Gjensidige Forsikring ASA, which is currently operating via its branch established in Lithuania. Due to this reason, further changes in the shareholders of the insurance undertakings are scheduled in 2015.
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