Insurers operating in the European Union in 2021 raised EUR 1,101 billion in premiums, representing approximately 19.0% of global gross written premium1 .
The year 2021 brought further challenges for the insurance market. Vaccines and gradual removal of pandemic restriction brought a relaunch of the economy, disrupted by the growing inflation at the end of the year. Growing digitization and process automation, observed at the beginning of the pandemic, continued in 2021. Remote work and customer service, with customers much more eager to conclude distance contracts or use digital tools in contact with insurers, was pursued. Due to the pandemic, clients were more fearful about the lack of access to medical care, severe illness or death of their closest family and friends, which generated more interest in life insurance and health insurance. The insurers still faced the challenge of growing natural disaster risk, high inflation, and the impact of the pandemic on business and sustainable finances.
In 2021, the average European citizen spent approximately EUR 1,977 on insurance2 . This figure stood at EUR 1,842 a year earlier3. The average Pole spent EUR 381 on insurance in 20214, which is nearly five times less than the average European citizen.
Insurance spending by residents of Lithuania, Latvia and Estonia was even lower, at EUR 264, EUR 277 and EUR 365, respectively5. In 2021, the average Ukrainian spent only EUR 39 on insurance6. In Poland, the market insurance model has been developing since 1990. The post-pandemic economy recovery was favorable for the Polish insurance market which observed an increase in the total value of policies and is now one of the largest markets in Central and Eastern Europe. Gross written premium in the Polish market in 2020 amounted to EUR 13.6 billion7. In 2021, it was EUR 14.4 billion8.
The United Kingdom enjoys the largest insurance market in Europe (EUR 337.5 billion in written premium in 2021). Markets above the EUR 100 billion gross written premium threshold include Germany (EUR 231.8 billion), France (EUR 249.1 billion), and Italy (EUR 161.8 billion). In 2021, as regards its value, the Polish insurance market was also superseded by those countries in Western Europe which have a much lower population than in Poland, e.g.: Austria (EUR 18.6 billion), Belgium (EUR 37.2 billion), Denmark (EUR 38.3 billion), Finland (EUR 26.1 billion), the Netherlands (EUR 78.1 billion), Switzerland (EUR 48.9 billion) and Sweden (EUR 40.5 billion)9.
The structure of the Polish market is dominated by non-life insurance (68% of the market), with the majority of gross written premium generated by motor insurance. In 2021, gross written premium collected on motor third party liability insurance and motor own damage insurance accounted for 37% (38% in 2020) of the entire market’s gross written premium10. The share of life insurance in Poland’s total gross written premium (32%) was lower than the European average
The Baltic countries are characterized by a similar structure of insurance markets. In those countries, life insurance, on average, accounts for less than 22% of total gross written premium11. In Western European countries, the situation is different and life insurance dominates. In 2021, over 41% of insurance premiums in Europe was generated in life insurance and nearly 59% in non-life insurance. Countries with the most developed life insurance market are countries that also have the largest insurance markets. These include Italy (in 2021, life insurance accounted for 75.9% of gross written premium), United Kingdom (71.2%), France (62.6%) and the Scandinavian states: Finland (81.6%), Sweden (75.7%), Denmark (74.9%) and Norway (59.0%)12.
Poland’s insurance penetration rate, which is the ratio of total gross written premium to gross domestic product (GDP), is below the European average. In 2021, this rate stood at 2.5%13, whereas the Europe average was 4.9%14. Even lower penetration rates were achieved in the insurance markets of Lithuania (1.3%), Latvia (1.5%), Estonia (1.5%)15 and Ukraine (1.0%)16. The highest penetration rates were recorded by Denmark (11.4%), the United Kingdom (11.1%), Finland (10.3%) and France (9.5%)17.
Analyzing the penetration of insurance in relation to GDP per capita, it can be expected that the Polish insurance sector will develop as Poland economy (GDP) grows, society becomes more affluent (with increasing disposable household incomes) and insurance awareness of the local population grows, which was exactly the path taken by West European countries.
1. 6. 8. Swiss Re, sigma 4/2022: World insurance: inflation risks front and centre
2. 4. Swiss Re, sigma 4/2022: World insurance: inflation risks front and centre; www.osp.stat.gov.lt; www.fktk.lv; www.andmed.stat.ee
3. Swiss Re, sigma 3/2021: World insurance: the recovery gains pace; Eurostat; www.osp.stat.gov.lt; www.fktk.lv; www.andmed.stat.ee
5. own calculations based on Eurostat and www.osp.stat.gov.lt; www.fktk.lv; www.andmed.stat.e
7. Insurance Europe, https://insuranceeurope.eu/insurancedata
9. 12. 13. 16. 17. Swiss Re, sigma 4/2022: World insurance: inflation risks front and centre
10. Polish Financial Supervision Authority, Annual Bulletin. Insurance market 4/2021, updated on 18 March 2021
11. Own calculations based on: www.osp.stat.gov.lt; www.fktk.lv; www.andmed. stat.ee
14. Own calculations based on: Swiss Re, sigma 3/2021: World insurance: the recovery gains pace; Eurostat; www.osp.stat.gov.lt; www.fktk.lv; www.andmed. stat.ee
15. Own calculations based on: Eurostat; www.osp.stat.gov.lt; www.fktk.lv/; www. andmed.stat.ee