English, Article edition: Single Market Effects Felt by Private Insurance Industry Thomas Url

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Physical Description
  • article
Language
  • English

Edition details

Title
  • Single Market Effects Felt by Private Insurance Industry
Author
  • Thomas Url
Physical Description
  • article
Notes
  • In 1998, effects emanating from the single European market had a major impact on the private insurance industry in Austria. For the first time, the industry recorded a decline in its revenues from casualty and accident insurance premiums. Price cuts made to survive in the fierce competition for market shares could not be compensated by an increase in the number of new policies. Between 1994 and 1998, the average premium for third-party motor insurance fell by almost 17 percent. Liberalisation of the insurance market first made itself felt in the third-party motor insurance sector and later extended its momentum to other motor insurance products (part comprehensive cover, passenger accident insurance) and, finally in 1997, to casualty insurance in general. According to provisional estimates made by WIFO, motor insurance customers as a result enjoyed savings of about ATS 5.4 billion (1998). Added to this are indirect price effects as a consequence of the modest price increases for insurance products compared to other products and services for everyday needs. Low losses in the past years were used by insurers to extend or at least maintain their market shares. Consumers benefit mainly by being offered low premiums and better services. Whether this strategy can be sustained will, however, depend greatly on the development of claims incurred. Although legislators took a major step towards improving traffic safety by reducing the statutory drunk-driving limit, the rising number of traffic fatalities this year still shows that the measure as such does not guarantee a permanent reduction of traffic accidents. The two other sectors of the private insurance industry went off at different tangents in 1998. Premium revenues from health insurance were slightly down (by 0.1 percent), but the life insurance sector easily overcame the effects of the tax increases caused by the austerity package of 1996, and, at almost 11 percent, achieved an unexpectedly high growth rate. Yet even this line recorded a decline in the number of new policies, although average premiums were up.
  • Deutliche Binnenmarkteffekte in der Privatversicherungswirtschaft; Single Market Effects Felt by Private Insurance Industry
  • RePEc:wfo:monber:y:1999:i:10:p:705-710
Language
  • English
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