In the half-year‘s period ERGO paid out indemnities in the value of more than EUR 42 million to its customers.
August 12, 2011
According to International Financial Reporting Standards (IFRS) and based on a year-on-year comparison, in the first six months of this year ERGO Baltic Insurance Group wrote premiums in the amount of EUR 66 million. In the half-year‘s period ERGO paid out indemnities in the value of more than EUR 42 million to its customers. The half-year‘s profit of ERGO Life Insurance SE, founded this year, rose almost 2.5 times and stood at over EUR 2.48 million.Dr Kęstutis Bagdonavičius, Chairman of the Management Board of ERGO Baltic Insurance Group, is convinced that the reviving economy of the Baltic countries has a positive impact on the insurance market and prompts it for growth whereas the key success factors for ERGO insurance operations include responsible and professional risk management. “Sprouting of profit in the life sector shows the apparent benefits of merging the life insurance companies in the Baltic countries while the extra-responsible approach of ERGO Baltic to the importance of technical provisions has facilitated prompt payout of indemnities, which have seen considerable growth in the half-year‘s period”, Dr Bagdonavičius remarks.
Positive trends in premiums, which were growing by nearly 3 %, were recorded in both non-life and the life sector. Growth in insurance premiums in the non-life sector was mostly influenced by MOD and MTPL insurance markets. In the ERGO non-life insurance company based in Lithuania these types of insurance increased by 32 % and 20 % respectively. In the life segment growth in premiums of the ERGO company, particularly in Lithuania and Latvia, benefited from taking over of Vital life insurance portfolio. After the takeover of Vital Life insurance portfolios in Lithuania and Latvia in 2010, the customer count of ERGO increased by 5,500.
Founded early this year, the European company ERGO Life Insurance earned over EUR 2.48 million in profit, this being almost 2.5 times more compared to the same period last year with reported profit of EUR 911,900. The greatest profit contribution came from the Latvian branch of ERGO Life Insurance SE.
Due to significant growth in the number of claims in the non life sector – in the first half of this year ERGO paid out indemnities to its customers valued at nearly EUR 33.4 million (EUR 31.3 million in 2010) – profit in the non-life sector was not attained. The greatest number of claims was indemnified by the non-life insurance company in Estonia where indemnities to customers amounted to EUR 16 million. The biggest claim in the amount of almost EUR 1 mln. was paid in Lithuania because of explosion in dairy factory.
Dr Bagdonavičius is convinced the economic situation provides realistic opportunities for cautious forecasting of higher growth in premiums this year. “The breakthrough on the insurance market took place in the second half of 2010. It was then when growth started for almost all types of insurance. Based on the latest forecasts of ERGO Insurance Group in the Baltic States, positive trends are foreseen for all insurance segments. Special expectations are associated with MOD and MTPL insurance sector: these types of insurance are most intensively used by medium-sized and big businesses, which are interested in reducing the highest risks. Bigger growth is also expected from the accident insurance sector: the economic downturn forced people to reconsider their priorities as they started focusing on obtaining financial security in the event of an accident. We envisage moderate growth in the life segment as well.“ Chairman of the Management Board Dr Bagdonavičius remarked.
ERGO Baltic Insurance Group
ERGO has been among leading insurance groups in the Baltic countries and the only one to offer a complete range of coverage including property insurance and accident insurance along with life, pension and health insurance. ERGO Insurance Group is also present in Belarus offering services to customers in the non-life sector. Over 450,000 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. ERGO has been represented in more than 30 countries in Europe and Asia. The Group is currently serving 40 million customers.
Munich Re, one of the world's largest reinsurance groups, is the majority shareholder of ERGO.
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