Latvian insurance market recorded an impressive double digit growth rate in 2011, reminding the good pre-crisis years. GWP amounted EUR 323 million, 19.3% y-o-y up. Yet, on the life insurance side the trend was strongly negative, with a 24% decrease in GWP, to EUR 35.4 million. On the non-life insurance segment, GWP volume amounted EUR 287.6 million, 28.4% more than in 2010.

A closer look at the life insurance portfolio shows a small depreciation on the traditional life insurance with savings line (-7.8%), while on the Unit-Linked products segment, the 2011 production was 18% higher than in 2010. One of the main drivers for this growth seems to be the strong tax benefit for life insurance saving contracts implemented in Latvia through which a customer can get up to 25% of premiums paid back if the contract is longer than 5 years. On the other side, supplementary accident and health clauses associated to life insurance policies recorded a 90% decline, to a symbolic GWP production of EUR 1.2 million.

The most impressive evolution in non-life was registered on the "Transport ownership liability insurance" class, which doubled its share in the market portfolio, to over 22%, by recording a 138.4% growth rate. Motor insurance lines, accounting for the heaviest part of the portfolio in 2010 (over 35%) recorded a flat GWP evolution, thus loosing about 5pp of their weight in the Latvian insurance market. MTPL is one of the very few business line reporting a negative change of almost 10%, mostly due to the still highly competitive market. "Prices kept dropping in early 2011. A 9% climb in road traffic accidents also had a negative impact on the industry," said an industry representative quoted by BNN journal.

Access www.xprimm.com and download the FY2011 Latvian insurance market statistics.

Market portfolio (in EUR and LVL):

• Gross written premiums
• Paid claims
• Growth rates