ERGO in the Baltic States grew significantly

May 25, 2015

ERGO in the Baltic States during the 1st Q of 2015 has shown excellent results in both – GWP and profit – as well as outperforming the market in all lines of business. During this period ERGO Baltic has written premiums in the amount of 44,9 million euros and in comparison to the same period last year, achieved growth of 14,5%. Positive bottom line result amounted to 2,29 million euros profit which is 15,3% more than the same period last year. During the 1st Q 2015 ERGO in the Baltic States has outperformed market in all business segments: P&C, Life and Health and increased its market share from 12,4% to 13,4% on regional level. While Baltic insurance market grew by 5,9%, ERGO grew by 14,5%. In the 1st Q of 2015 ERGO customers in the Baltic countries were paid 22,3 million euros in claims, this amount is by 17% higher than during the same period last year. ERGO strategic focuses remain strong customer focus and sustainable profitable growth within UW discipline.

Commenting the 1st Q results of ERGO in the Baltic States Dr. Bagdonavičius, Chairman of ERGO insurance companies in the Baltic States, emphasizes that such an excellent result has been achieved due to stable loss ratio and due to increased efficiency. “The growth of the GWP is foreseen in the future as well, it is not a random consequence of positive effects, however, the outcome of the implementation of our strategic initiatives seeking for the ERGO companies to be efficient and focused on our customer”.

The increase in GWP was caused by excellent business activities in all three countries and in all segments: P&C, Life and Health. In P&C growth has been indicated in almost all lines of business except cargo and transport due to Russian/ Ukraine crisis. The GWP growth in Life insurance segment was generated by bancassurance, own sales network, excellent Health business development was strengthened by new group contracts. The most popular Life insurance products remain Endowment insurance, Private pension insurance (annuities) and Life risk.

ERGO in all the Baltic States has outperformed the market. During the 1st Q 2015 Estonian insurance market grew by 4,0%, while ERGO outperformed it and grew by 21,6%. ERGO in Latvia grew by 16,9%, while Latvian insurance market grew by 6,1%. ERGO also grew faster than the market in Lithuania: 8,2% (market growth was 6,9%).

In the 1st Q 2015 ERGO customers in the Baltic countries were paid 22,3 million euros in claims, which is more than 17% in comparison to the same period last year. As usually in the winter season most of the claims were recorded in the private property insurance due to fires.
Both ERGO companies are well capitalized and are above the ERGO Group long term minimum requirement of 140% solvency ratio. In ERGO P&C company the Solvency I ratio increased from 207% to 215%. The Solvency I ratio in ERGO Life company slightly decreased from 179% to 164% due to fast growing business and strengthening of techn. provisions. The equity increased from 106 million euros to 115 million euros. Significant growth of investment portfolio amounting by 337 million euros (319 million euros in 1 Q 2014) related to growing Life business volumes.

Commenting the trends and prognoses of insurance market in the Baltic States Dr. Bagdonavičius forecasts a growth of Baltic insurance market with some exceptions. „Forecasts of ERGO in the Baltic States show that economy of the Baltic States is recovering as well the volumes of P&C, Life and Health insurance businesses will continue to grow this year. Still key questions are how sustainable is recovering as well as we have to keep in mind the geopolitical environment. The direct effect of Russia/ Ukraine crisis will be on the business sector with commercial and industrial business partners in the East. When foreign investments in Russia shrink, attracting the new investments to the Baltic countries is also affected. All of this can lead to a slower market and insurance industry’s growth”, Dr. Bagdonavičius says. “On the other hand, it is remarkable that insurance market has recovered after the financial crisis, when not only the macroeconomic situation in the Baltic States was heavily affected. This had an enormous influence also on the insurance industry with a double digit drop in overall market premiums. Looking to where we were in 2009 and where the insurance market is today, it is a big step forward already“, says Dr. Bagdonavičius.

ERGO in the Baltic States

ERGO has been among leading insurance groups in the Baltic States and offers a complete range of coverage including non-life insurance along with life and health insurance. Premiums of ERGO Baltic totalled EUR 163 million in 2014. Last year customers in the Baltic countries were paid more than EUR 82 million for insurance claims. ERGO is also present in Belarus offering services in the non-life sector. Over 550,000 customers in the Baltic States trust the services, know-how and financial stability of ERGO Group.

ERGO companies operating in the Baltic countries are part of the ERGO Group – one of the major insurance groups in Germany and Europe. Worldwide, the Group is represented in over 30 countries and concentrates on Europe and Asia. In 2014, ERGO recorded a premium income of 18 billion euros.

ERGO is part of Munich Re, one of the leading reinsurers and risk carriers worldwide.

More info: Lina Jakučionienė, Head of Corporate Communication in the Baltic States,, Tel. +370 268 3076