ERGO in the Baltic States: sustainable and market outperformed development
November 19, 2015
ERGO in the Baltic States during the 1-3Q 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 written premiums in the amount of 134 million euros achieved the growth of almost 14% in comparison to the same period last year. Positive bottom line result amounted to 5,13 million euros profit which is 42% bigger than the same period last year. During the 1-3Q of 2015 ERGO in the Baltic States has outperformed market in all business segments: P&C, Life and Health and increased its market share from 12,5% to 13,4% on regional level. While Baltic insurance market grew by 6,6%, ERGO grew by 13,8%. During nine months of 2015 ERGO customers in the Baltic countries were paid 65 million euros in claims, this amount is by ca. 13,3% higher than during the same period last year.
Commenting the 1-3Q results of ERGO in the Baltic States Dr. Bagdonavičius, Chairman of ERGO insurance companies in the Baltic States, emphasizes that even under fierce competition ERGO is able to keep the leading position in the insurance market in the Baltic States. “Even with tough competition ERGO has a leading position in the Health market in the Baltic States. We also have strengthened our positions in non-life insurance and have grown in life insurance. Such an excellent result has been achieved due to successful implementation of growth initiatives, stable net loss ratio and due to decreased net cost ratio. The profitable growth of our business remains remarkable”, says Dr. Bagdonavičius.
ERGO in all Baltic States has outperformed the market. The increase in GWP was caused by excellent business activities in all three countries and in all segments: P&C, Life and Health. Main driver in P&C is motor business (MOD, MTPL), in Life insurance – bancassurance activities.
In 9 months of 2015 ERGO customers in the Baltic States were paid 65 million euros in claims, which is 13,3% in comparison to the same period last year. This year there are 8 claims, exceeding 250 thousand euros, reported: 4 claims in Lithuania, 3 in Latvia and 1 in Estonia. The biggest claim has been fixed in Lithuania due to fire in amount of 1,5 million euros.
Both ERGO risk carriers are well capitalized and are above the ERGO Group long term minimum requirement of 140% solvency ratio. Significant growth of investment portfolio amounting by 332 million euros (319 million euros in 1-3 Q 2014) is related to growing Life business volumes.
Commenting the trends of insurance market in the Baltic States Dr. Bagdonavičius emphasizes the new regulatory environment, which will cause a new rhythm of performance within insurance market. „From the beginning of next year the European directive Solvency II will come into force. Stricter requirements that have been in development for over a decade will oblige the players of the insurance market to become more transparent with regard to supervisory authorities, while consumers will be sure that an insurance company’s solvency has been evaluated by taking into consideration the risks portfolio of a specific company. ERGO companies in the Baltic States began the preparation for changes immediately after the planned requirements of the directive were made public, together with the entire Munich Re and ERGO Group, therefore, today we already have uniform and flexible supervision of qualitative and quantitative indicators”, says Dr. Bagdonavičius.
According to Dr. Bagdonavičius, the biggest challenge for the whole insurance industry will be changing behaviour of customers, which go together with the fast development of the digital environment. The insurance business must be dynamic and keep up with the latest technology trends, to focus on individualized services and be ahead of customer needs”, 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.