Czech Republic Life Insurance Reviewed through 2016 by Timetric
26 Apr 2012 • by Natalie Aster
The Czech Republic contains the second-largest life insurance segment in Central and Eastern Europe, after Poland. The Czech life insurance segment grew in written premium value rapidly at a compound annual growth rate (CAGR) of 9.3% during the review period (2007–2011). The steady growth in life insurance written premiums was mainly due to the rising number of single-premium product sales. However, the growth rate of the overall life insurance segment decelerated from 19.8% in 2010 to 8.5% in 2011 due to the recent unfavorable global economic environment. The country’s GDP grew by 1.2% during the review period, and the contribution of life insurance written premium to GDP increased from 1.37% in 2007 to 1.81% in 2011. Over the forecast period (2012–2016), the Czech life insurance segment growth will be supported by the popularity of product innovations introduced by leading insurers and the high demand for single-premium products.
According to the report “Life Insurance in the Czech Republic, Key Trends and Opportunities to 2016” by Timetric, the market size of the life insurance segment is expected to increase at a CAGR of 9.9% over the forecast period. In addition, the number of life insurance policies sold is expected to increase at a CAGR of 5.7% over the forecast period. This growth will be mainly driven by the country’s improving economy, rising income levels and increasing popularity of insurance products in rural areas. In addition, the life insurance segment will also benefit from the Czech Republic’s expanding working population, improving penetration of distribution channels that sell insurance products, and availability of a wider range of innovative insurance products.
Life Insurance in the Czech Republic, Key Trends and Opportunities to 2016
Published: March, 2012
Price: US$ 1.950,00
Czech unit-linked life insurance products accounted for 40% of unit-linked life insurance policies in the Central and Eastern European region in 2011. Unit-linked insurance products also accounted for 58.6% of the Czech life insurance written premiums in 2011. The written premium of these products doubled during the review period, and it is expected to account for a share of 80.7% the total life insurance written premiums in 2016. Unit-linked products are generally regarded as long-term saving products, and are expected to grow strongly when the country’s demand for financial services recovers.
A steady increase in new Czech life policy sales is expected over the forecast period. This is due to factors such as the increasing penetration of bank branches in rural areas that sell life insurance products through bancassurance. In addition, the penetration of distribution channels will improve as the life insurance distribution channels are anticipated to become more efficient and as insurance companies utilize new distribution channels such as online and telemarketing.
The regulatory environment in the Czech Republic has become more favorable to foreign companies during the last decade. Regulations are expected to become more stringent over the forecast period, as new proposals by the Czech regulatory authority, and the EU Solvency II Directive’s proposed solvency standards will increase the minimum capital requirements for Czech life insurance companies. The changing regulations are designed to improve life insurance companies’ transparency through more extensive disclosure of information, and to improve insurance companies’ product development and pricing strategies.
More information can be found in the report “Life Insurance in the Czech Republic, Key Trends and Opportunities to 2016” by Timetric.
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