Measured by gross written premium in the first three quarters of 2020, the non-life insurance market in Poland grew by a total of PLN 33 million (+0.1%) in comparison to the corresponding period of the previous year.
The market growth was driven primarily by gross written premium increase in the non-motor insurance area by PLN 424 million (+3.4% y/y), while gross written premium in the motor insurance area was PLN 391 million lower (-2.1% y/y).
In motor insurance the gross written premium in motor TPL insurance, which is the most important category for the overall market, (PLN 11.8 billion representing 37.8% of the overall premium in non-life in the first three quarters of 2020) fell by PLN 384 million y/y (-3.2% y/y). The change in premium was negative again, both in direct (down by PLN 329 million, -2.9% y/y) and indirect business (down by PLN 55 million, -6.1% y/y). These trends were caused by active price-based competition initiated after a period of high profitability of the portfolio, supported by lower frequency of losses (the period of periodic social isolation as a result of the pandemic) and a slow-down on the leasing market. The sales of motor own damage insurance declined by PLN 6 million (-0.1% y/y) to PLN 6.4 billion, which accounted for 20.7% of the overall written premium in non-life insurance in the first three quarters of 2020.
In non-motor insurance, the increase in gross written premium growth was affected mostly by higher sales of insurance against fire and other damage to property (up PLN 559 million, or 10.0% y/y, of which PLN 361 million was for direct activity), liability insurance (up PLN 97 million, 5.3% y/y) and assistance (up PLN 50 million, 5.2% y/y). A decline occurred only in various financial risk insurance products (down PLN 157 million, -18.9% y/y) and accident and sickness insurance (down PLN 196 million, -8.9% y/y).
*PZU Group – PZU, LINK, TUW PZUW; 32.1% - PZU Group’s market share in non-life insurance on direct business.
Groups: Allianz – Allianz, Euler Hermes; Ergo Hestia – Ergo Hestia; Talanx – Warta, Europa; VIG – Compensa, Inter-Risk, TUW TUW, Wiener (Gothaer); Generali - Generali, Concordia
Source: Polish Insurance Chamber / KNF’s Quarterly Bulletin. Rynek ubezpieczeń [Insurance Market] 3/2020
In the first three quarters of 2020, the overall non-life insurance market generated a net result of PLN 3,038 million, which is PLN 893 million less in comparison with the corresponding period of 2019. Excluding the dividend from PZU Życie, net profit of the non-life insurance market decreased PLN 892 million (-34.3%).
After the first 3 quarters of 2020, the technical result of the nonlife insurance market rose PLN 243 million to PLN 2,362 million. The largest contributor was an increase of the technical result on motor own damage products by PLN 235 million (effect of an increase in earned premium with a simultaneous decline in claims and benefits paid) and by PLN 62 million in assistance products, while the result on insurance against fire and other damage to property fell by PLN 78 million and on loan and guarantee insurance products was PLN 31 million lower y/y.
To address expectations voiced by clients, the PZU Group has been consistently extending its offering in recent years for both retail and corporate clients. As a result, it has been able to retain its high market share.
After three quarters of 2020, the PZU Group had a 32.6% share in the non-life insurance market (32.1% on direct activity) compared to 33.7% in the corresponding period of 2019 (33.2% on direct activity). It recorded a slight decline but maintained high profitability of the portfolio.
After the first three quarters of 2020, the PZU Group’s technical result (PZU together with LINK4 and TUW PZUW) stated as a percentage of the overall market’s technical result was 45.6% (the PZU Group’s technical result was PLN 1,077 million while the overall market’s technical result was PLN 2,362 million).
The total value of the investments made by non-life insurers at the end of Q3 2020 (net of the investments in subsidiaries) was PLN 66,630 million, up 9.1% compared to the end of 2019.
Non-life insurers estimated their net technical provisions at an aggregate amount of PLN 58,030 million, signifying 3.4% growth compared to the end of 2019.
|Gross written premium vs. technical result||1 January – 30 September 2019||1 January – 30 September 2020|
|PZU*||Market||Market net of PZU||PZU*||Market||Market net of PZU|
|Gross written premium||10,482||31,079||20,597||10,131||31,112||20,981|
As the PZU Group’s parent company, PZU offers an extensive array of non-life insurance products, including motor insurance, property insurance, casualty insurance, agricultural insurance and third party liability insurance. At yearend 2020, motor insurance was the most important group of products offered by PZU, both in terms of the number of insurance agreements and its premium stated as a percentage of total gross written premium.
Faced with changing market conditions, PZU realigned its offering in 2020 to clients’ interests and needs by rolling out new products and innovative solutions.
PZU’s activities in the mass insurance segment:
Most of the changes in the corporate insurance segment increased the effectiveness of collaboration with intermediaries and the appeal of the dedicated offering for fleet clients and leasing companies. Major new products included:
In financial insurance, PZU was unswerving in its support for the Polish economy by providing insurance guarantees and securing the performance of contracts in such key areas as the power sector, the construction industry and the science and innovation sector. The most important activities related to the product offering were as follows
In 2020, PZU cooperated with 8 banks and 10 strategic partners. PZU’s business partners are leaders in their respective industries and they have client bases offering the possibility of extending the PZU’s offering with additional innovative products geared towards those clients. By actively cooperating with PZU Group’s banks, i.e. Bank Pekao and Alior Bank, PZU continues the implementation of a comprehensive offering using the banks’ distribution networks. This cooperation has allowed PZU to steadily expand the offering and scale of sales of insurance products linked to bank products, including insurance coverage for cash loans and mortgage loans.
In strategic partnerships, cooperation was based mostly on companies operating in the power sector through which PZU offers assistance services, e.g. the assistance of an electrician or a plumber as well as the newly introduced health assistance. PZU’s insurance offering is also present on the e-commerce market through cooperation with PLL LOT, iSpot and Allegro.
LINK4, the first insurance company in Poland offering products by phone continues to be one of the leaders on the direct insurance market, extending its cooperation with multi-agencies, banks and strategic partners. It offers an extensive array of non-life insurance products, including motor, home, travel and third party liability insurance.
Given the changing market situation, the company has focused on the development of innovative solutions providing added value to both its clients and business partners. By using new technologies in internal processes and in relations with clients, the company continues to challenge the way of thinking about insurance. At the end of 2020, LINK4 had 47 fully-robotized processes and 9 applications, which support daily tasks of employees.
As the first insurance company on the Polish market, LINK4 started to provide public documents to clients in 2020 on a durable medium using the blockchain technology. Thanks to that, they have access to electronic versions of documents with a guarantee that they cannot be modified and removed over time. By doing this, the company satisfies legal requirements by using cutting-edge technology, making communication much easier, while reducing the need for mailing hard copy documents.
LINK4 was one of the first insurers in Poland to established the function of the Client Ombudsman in 2020 in cases that go beyond the available complaint paths.
In connection with the COVID-19 pandemic, the company introduced a number of solutions to facilitate the work of intermediaries. Just one week after the state of epidemic was announced, it introduced the option of executing insurance contracts remotely, without the client having to sign the documents. It also introduced the option of carrying out inspections without the participation of an agent.
It also launched a special claims hotline for clients who are employees of medical services, the police, city guards or other public service institutions that are directly involved in combating the pandemic, as well as volunteers assisting the infected and the elderly. Their notifications are processed first.
The recognition enjoyed by LINK4 on the market and among its employees is confirmed by the title of the Best Quality Employer 2020. The award granted by Centralne Biuro Certyfikacji Krajowej places LINK4 among the best employers in Poland.
In 2020, LINK4 focused on expanding further its product offering, adapting it to the changing expectations of its clients and business partners. Its key activities included:
TUW PZUW’s activity
Towarzystwo Ubezpieczeń Wzajemnych Polski Zakład Ubezpieczeń Wzajemnych (TUW PZUW) offers flexible insurance programs customized to the needs of the insured in terms of insurance cover and costs of the cover. Since 2016, it has been selling and handling commercial insurance products for various industries, focusing predominantly on cooperation with large enterprises, medical centers (hospitals and clinics), church entities and local government units.
At the end of 2020, the TUW PZUW had 432 members, which is 50 more than the year before. They are grouped by specific criteria (industry, corporate, risk types) in 52 mutual benefit societies (their number grew by two as compared to the previous year).
TUW PZUW is consistently attuning its operating model to the growing scale of business by expanding its team of professionals, who provide comprehensive service of its members’ insurance and tailor the offering to the members’ individual preferences.
In 2020, TUW PZUW continued its dynamic growth in terms of sales. It implemented new products and innovative service solutions, responding to the needs of the changing market and client expectations.
The most significant change in the offering was the launch of the Machinery Loss of Profit (MLoP) product for both large and smaller businesses. In the strategic partnership (affinity) area, an insurance offer was developed for renewable energy sources and assistance for clients with photovoltaic installations.
On the „500 List”, which is the list of largest Polish companies prepared by the Rzeczpospolita daily, TUW PZUW increased its ranking in 2020 from 460th (in 2018) to 407th. As a result it ranked 12th in the “Top Movements” category. It was also ranked 30th in the list of companies with the highest income growth (53rd in last year’s edition).
Factors, including threats and risks, that may affect the operations of the non-life insurance sector in 2021
In addition to chance events, such as flood, drought and spring ground frosts, the following risks are possible: