Czech Insurance Market Experiences Slowdown in Q1 2023

According to the Czech Insurance Association, the Czech insurance market experienced a slowdown in growth in the first quarter of 2023. Insurance companies collected CZK 42.9 billion in premiums, representing a year-on-year increase of 5.5%. The market will grow by 7% in 2022.

The association reported that the development in life insurance contributed to the slowdown. Premiums for corporate insurance were also lower. Conversely, other significant segments of non-life insurance, including vehicle insurance and retail property and liability insurance, continue to strengthen their nominal growth rates, but this is not enough to compensate for the current significant impact of inflation.

The prescribed premiums for life insurance increased by 2.6% year-on-year to CZK 13 billion. In the dominant group of regularly paid policies, which represent 95% of all life insurance policies, growth slowed to 2.8%. Single premiums decreased by 5.9% year-on-year. According to the association, the number of life insurance policies continues to decline, with a 1.1% year-on-year decrease, leaving active policies at 4.855 million.

Insurance analyst Jaroslav Urban of the association said, “Growth in non-life insurance slowed due to currently lower premiums for corporate insurance, which always have a larger share in the first quarter of the year than in other periods and last year strengthened unusually.” The total premiums amounted to CZK 29.9 billion, representing a year-on-year increase of 6.8%, which falls short of the 8.9% growth in the previous year. However, development in the main groups of non-life insurance is different.

Vehicle insurance remains dominant, with premiums for liability insurance reaching CZK 7.7 billion, a year-on-year increase of 5.4%. The trend is similar in vehicle collision insurance, with premiums increasing gradually, compared to the same quarter of the previous year and the annual results. Prescribed premiums increased by 11.6% to CZK 7.5 billion. The still-increasing portfolio of insured vehicles partially supported the trend.

Premiums for corporate insurance increased by 1.5%, significantly less than the 16.2% growth in the previous year. Retail property and liability insurance continue to experience high nominal growth rates, and this trend continues to be upward. Prescribed premiums increased by 13.3% year-on-year to CZK 4.3 billion, the association added.

The Czech Insurance Association’s data indicate that the insurance market is still growing, but the pace of growth has slowed. Factors such as inflation and the decline in life insurance policies are challenging for the industry. However, vehicle insurance, especially liability and collision insurance, remains the primary driver of growth. The market will continue to be shaped by changing consumer preferences and the broader economic environment.