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ERGO in the Baltic States in the Q1-2 2012: more premiums, profit and benefits paid out to the customers

August 13, 2012

According to an IFRS-based assessment, in spite of turbulence experienced on the capital markets, ERGO Insurance Group in the Baltic States in the first half of this year wrote over EUR 72.4 million in premiums, which resulted in a growth of 9.7 %, and earned EUR 5.04 million profit. In the 2 quarters ERGO customers in the Baltic countries were paid over 8.3 % more claims compared with last year (EUR 45.8 million in 2012, EUR 42.3 million in 2011).

According to an IFRS-based assessment, in spite of turbulence experienced on the capital markets, ERGO Insurance Group in the Baltic States in the first half of this year wrote over EUR 72.4 million in premiums, which resulted in a growth of 9.7 %, and earned EUR 5.04 million profit. In the 2 quarters ERGO customers in the Baltic countries were paid over 8.3 % more claims compared with last year (EUR 45.8 million in 2012, EUR 42.3 million in 2011).

According to Dr. Kęstutis Bagdonavičius, Chairman of the Management Board of the ERGO Insurance Group in the Baltic States, gradual and moderate recovery of the Baltic countries economy revitalised the insurance market. “The stabilization of the economic situation, prudent underwriting policy as well as solutions, which were implemented timely and consistently according to the market situation – these are the reasons for managing increase in profit and premiums. All ERGO insurance companies in the Baltic States regardless of the challenging economic environment achieved excellent results, which comply with the profitable growth strategy of the ERGO Insurance Group in the Baltic States”, Dr. Bagdonavičius says.

The premiums growth in the non life insurance segment (EUR 53.9 million in 2012, EUR 49.9 million in 2011) was achieved due to recovery of key LoB, Motor and Property. In the 2 quarters of this year by more than 30% ERGO in Latvia and Lithuania experienced growth in MOD, whereas ERGO in Estonia reported a 24.3% boost for MTPL. Good results were also obtained in the health and life insurance segments – ERGO in every country has outperformed market totalling more than EUR 18.5 million written premiums (EUR 15.9 million in 2011). The highest premium growth in health insurance segment was reported in Estonia (37%). Latvia leads by life insurance premiums, which represents a 38 % year-on-year growth. 

The positive result of EUR 5.04 million profit complies with the profitable growth strategy of the ERGO Insurance Group in the Baltic States. ERGO enhanced its financial strength and stability even more: in 2012 investment portfolio of ERGO in the Baltic States grew to EUR 348 million (EUR 312 million in 2011).

In the half year ERGO customers in the Baltic countries were paid over 2.1 % more of non-life insurance claims compared with last year and 30.7% of life insurance claims. The biggest indemnity paid out in the half year in Lithuania was more than EUR 0.78 million to compensate the restoration of a house struck by fire in Lithuania. In Estonia three biggest claims exceeded EUR 0.5 million per each – two property claims and one transport claim. The biggest claim in Latvia was EUR 0.1 million for a stolen pit excavation tractor.

The subsidiaries of the ERGO Insurance group in the Baltic States – ERGO in Belarus, ERGO Invest and ERGO Funds – earned more than EUR 314 thousand profit.

Commenting the forecasts of the ERGO Insurance Group in the Baltic States Dr. Bagdonavičius emphasizes the future perspectives to be good and promising. “Although in different tempos in each country, the recovery in the insurance industry follows. The long term growth perspective in the Baltic States is quite positive, though the need of focus on efficiency is very high. During the next years the insurance market is likely to face consolidation – this means that in the future the Baltic countries will have fewer insurance companies, and undertakings will be able to operate more efficiently and with optimized costs, thus offering coverage for a lower premium, however, we must always remain vigilant as we see some prognoses about possible next wave of the economic downturn”, Dr. Bagdonavičius says.

ERGO Insurance Group in the Baltic States

ERGO has been among leading insurance groups in the Baltic States and the only one to offer a complete range of coverage including property insurance and accident insurance along with life, pension and health insurance. Premiums of ERGO Baltic totalled EUR 138.2 million in 2011. Last year customers in the Baltic countries were paid more than EUR 82.3 million for insurance claims. ERGO Insurance Group 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 international ERGO Group – one of the largest insurance corporations in Europe with annual written premiums totalling EUR 20 billion. In 2011 ERGO paid out benefits to customers amounting to EUR 17.5 billion. Worldwide, the Group is represented in over 30 countries and concentrates on Europe and Asia. The Group is currently serving 40 million customers.

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