In 1992 the accounting rules applying to Austria's Insurance business were adjusted to those of the European Economic Area. Despite the changeover, the most important indicators allow comparisons with previous years. Insurance premium revenues from domestic and foreign business have grown by 9.9 percent to AS 115.4 billion in 1992. According to preliminary estimates by the Insurance Association the year 1993 saw a further expansion by 13.8 percent. From 1991 to 1992 insurance payments rose by 6.2 percent to AS 72.1 billion; an increase of 9.7 percent is expected for 1993. This favorable situation is mainly due to the development in the property and accident insurance business. In these two branches premium revenues soared by 11 percent, while the growth in insurance payments slowed down to 4.2 percent. Preliminary estimates for 1993 point to a deceleration in the growth of premium revenues to 6.5 percent and an increase in payments of 7.6 percent. Life insurance posted an increase in premium revenues of 9.6 percent in 1992, signifying a marked recovery from 1991. The decline in the interest rate in the secondary market by more than 1.5 percentage points, as well as the introduction of the tax on capital income, has brought about a further move towards one-off payments in life insurance. There are indications that premium revenues surged by 30.2 percent in 1993. The disbursement of life insurance payments is determined by the maturity dates of one-off payments and provides no conclusive evidence on the situation prevailing in this line of business. The yield on financial assets of life insurance companies is estimated at ½ percentage point above the interest rate in the secondary market in 1992. The situation of the private health insurance companies in 1992 and 1993 was characterized by steep price increases for health services. The growth in insurance payments (11.4 percent) again exceeded that of premium revenues (9.6 percent). This pattern is likely to continue into 1993, though in a somewhat attenuated form. Figure 1 describes the development of the Consumer Price Index and of a price index of health services since 1987. A positive deviation means that prices in the health sector rose at an above-average rate. A comparison with the United States makes the steep price increases during the last few years stand out even more. In addition to these supply factors, demand for health services is likely to rise over the medium and long term. The average life expectancy is still on the increase and raises the need for care for the elderly. The consequences have been felt by the private health insurance companies for some years now. The number of insured persons is stagnating, and the rise in premium payments is almost solely due to increases in premium rates. Consumers tend to spend more on average for personal and health care. In 1993, outlays for these categories rose by 5.7 percent, while total consumption increased by no more than 0.8 percent. This pattern was also observed in earlier years. Consumers attempt to substitute health care services by measures of preventative health care and thus try to save on insurance premiums.
Versicherungswirtschaft weiter im Aufschwung. Die österreichische Privatversicherungswirtschaft 1992/93; Insurance Industry Continues Expansion
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