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ERGO in the Baltic States: more benefits paid out to the customers, increased premiums and double higher profit

November 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 9 months of this year wrote almost EUR 107 million in premiums, which resulted in a growth of nearly 10 %, and earned a double higher profit of EUR 7.9 million in comparison with previous year (EUR 2.9 million in 2011).  In the 3 quarters ERGO customers in the Baltic countries were paid 8 % more claims compared with last year (EUR 65.5 million in 2012, EUR 60.6 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. “We are satisfied with the result for the third quarter in this very challenging market environment. Our forward-looking risk management, prudent investment policy and profit-oriented underwriting approach are proving particularly effective in this difficult macroeconomic climate and 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.

ERGO almost in every country has outperformed the market: while the Latvian Life market shrunk 4.7%, ERGO grew 57%. ERGO grew faster than market also in Estonian P&C, Life and Health market as well as Lithuanian Life market. The premiums growth in the non life insurance segment (EUR 80 million in 2012, EUR 73.1 million in 2011) was achieved due to recovery of key LoB, especially Motor. In the 3 quarters of this year by more than 26% ERGO in Estonia experienced growth in MTPL, whereas ERGO in Latvia reported a 26% boost for MOD as well as MTPL. Lithuania grew in MOD by 22%.

Good results were also obtained in the life and health insurance segments – ERGO in the Baltic States totaled more than EUR 27 million written premiums (EUR 24 million in 2011). The highest premium growth in life insurance segment was reported in Latvia (29%). Estonia leads by health insurance premiums, which represents a 29 % year-on-year growth. 

The positive result of EUR 7.9 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 341 million (EUR 312 million in 2011) while the equity exceeded almost EUR 140 million (EUR 134 million in 2011).

In 9 months of this year ERGO customers in the Baltic countries were paid by 8 % more insurance claims. The biggest indemnity paid out in Estonia amounted to EUR 400 thousand in Motor insurance case abroad as well as in order to compensate a storm and rain damage of warehouse by EUR 200 thousand. In Latvia the biggest damages paid out exceeded by EUR 155.5 thousand and EUR 134.5 thousand due to fires reasons. ERGO in Lithuania reserved EUR 290 thousand in order to compensate fire damage to a store.

The subsidiaries of the ERGO Insurance group in the Baltic States – ERGO in Belarus, ERGO Invest and ERGO Funds – earned more than EUR 270 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. “Based on positive macroeconomic development Baltic insurance market is expected to grow ca. 3-4%. Penetration and density in the Baltic States are still low compared to Europe and Eastern Europe indices, but increasing insurance awareness may lead to growing market potential. During the next years further market consolidation of Baltic insurance market is foreseen, which will lead to increased cross border business through branches”, 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.