Life Insurance Drives Growth of Private Insurance Sector in 1999
The private insurance industry recorded above-average premium growth rates in 1999. In contrast to previous years, all insurance lines contributed to the growth. Premiums grew by almost one fifth in the life sector. Projections by the Austrian Insurance Association indicate that the trend should continue in 2000. An expected total growth rate of premiums by 6.6 percent will be mostly achieved by life insurance (+12.8 percent), while the two other lines will only have increases of just below 2 percent. The projection reflects international trends which point at rising market concentration and competitive pressure for non-life insurance lines. The development of insurance prices within the consumer price index leads to the impression that the single market effect did not continue to work in 1999. Nevertheless, such a conclusion should be viewed with caution, considering the difficulties of properly measuring prices for services. The average premium for third-party automobile insurance declined by 22.3 percent in the period from the launch of the single market in 1994 until 1999, in spite of the fact that the sum insured per car and the cost of repair and maintenance index published by the Austrian Insurance Association both rose substantially over the same period. The price effect between 1994 and 1999 is distorted by about 5½ percentage points, because of the higher proportion of bonus drivers. Accordingly, by a rough estimate some 17 percentage points of the premium reduction are due to the actual single market effect. As a consequence, the result from insurance activity in the property and liability line has deteriorated even further. Insurers have been able to compensate this only by an above-average financial result.
Bereich Leben stützt 1999 Wachstum der Privatversicherungswirtschaft; Life Insurance Drives Growth of Private Insurance Sector in 1999
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