The Polish insurance market

The Polish insurance market
Key players
The Polish insurance market is the 15th largest in Europe with EUR 12,5 billion gross written premium. Life insurance accounts for EUR 5,2 billion while non‑life is valued at EUR 7,2 billion. While the market is supported by a large and buoyant economy, it is restricted by a low insurance penetration. Gross written life and non‑life premiums in Poland total EUR 325 – per capita yearly –an estimated sixth of the EU average. This figure is a result of demand restraints from a developing economy.

Most major international insurance groups are present in Poland and offer a full range of products. The Polish market is full of opportunities with great long‑term growth potential, particularly as demand for insurance is growing alongside an increase in risk awareness and disposable income.

Life insurance
The life insurance market was growing rapidly but began to significantly decline over the last few years mainly due to legislative changes that led to fewer sales of unit‑linked insurance. Traditional life insurance however, continues to grow and in addition, insurers are developing a commercial medical insurance policy making it a topic of conversation. The market size is over EUR 130 million and has huge growth potential.

Non‑life insurance
The non‑life market in comparison has experienced a steady growth over the last 10 years. Premium income is evenly split between motor insurance and all other non‑life products. Over the last year, the former witnessed a dramatic rate increase, boosting total premium volume (this trend continues). Other non‑life products report a steady growth even though the market remains soft – a result of proactive intermediaries increasing awareness.

Claims ratios
Claim ratios in 2016 were: 77% for life insurance, 67% for motor insurance and 44% for other non‑life business. Due to a claims ratio permanently exceeding 100% for motor third‑party liability, insurers were forced to significantly increase rates. Now the claim ratios are considered healthy, the underwriting policy can stay as it is for a longer period of time. The remaining figures are steady year upon year, however there are times when non‑life business is impacted by a rare natural disaster. Poland is not in a seismic region but flooding can be an occasional issue.

The non‑life sector remains very soft in terms of premium rates, but there are some early signs of a harder approach being taken.

There are 27 life insurers operating in the Polish market; the six largest account for two‑thirds of gross written premium. The leading life insurer is PZU Zycie SA with a nearly 30% market share, this is followed by AVIVA and Metlife. In non‑life there are 31 insurers; PZU SA is the market leader with more than a 30% share, next are Ergo Hestia and Warta (Talanx Group) who are similar in size. The five biggest insurers account for more than two‑thirds of gross written premium.

Mandatory insurance
There are over 150 mandatory insurance policies in the Polish market – the second largest number in Europe behind France. Typically offered by commercial insurers, there are no single providers specialising in this cover alone.
Legislation surrounding mandatory insurance is very complex and requires the skills of a professional broker to interpret properly. The vast majority of this mandatory cover is within the professional indemnity area. In most cases, policies offer a wide range of cover, meeting legal requirements, and a low minimum guaranteed sum. An example of this is the need for fire insurance for farm buildings.
Companies required to have this type of cover should work with their broker to assess exactly what is needed. The broker can then design a comprehensive insurance programme that combines mandatory and non‑mandatory policies, optimizing cover and premiums.

Non‑admitted insurance
As Poland is a member of the European Union, it enjoys freedom of service within the insurance sector, and because there are no specific regulations for non‑admitted cover from a legal perspective, it is possible for non‑Polish firms to enter the market and take advantage of the dramatic increase in awareness of the need for insurance. Many companies operating in Poland however, face strict cover requirements associated with, but not limited to, third party liability. Cover restrictions can come from financing parties, public and private buyers, landlords, etc., so it is vital businesses use a skilled and experienced local insurance broker to ensure all their key risk exposures are covered. If there is a growth in non‑admitted cover it is likely to hinder those keen to build a strong business presence. Premiums and payouts are not taxed in Poland which makes it a good base for international insurance programmes. A developed product portfolio with very competitive rates and low deductibles are also key attractions.

Distribution channels
Poland’s three main distribution channels are similar to most European countries; direct, sales via agents and sales via brokers. Polish regulations however, consider brokers to be buyers, rather than sellers, so they should not be viewed as a single distribution channel.

It is a very competitive market. There are over 16,000 businesses registered as multi‑agents (agents representing more than one insurer), 17,000 sole agents, 800 individual brokers, 400 corporate brokers and more than 120,000 people registered as agents. This figure almost recently doubled due to changing legal regulations concerning bancassurance and insurance distribution. This fierce competition is driving brokers to extend their service provision, but it is the larger and more technologically advanced brokers that have the edge and as a result, the market is starting to consolidate. 

While the number of businesses and agents are likely to significantly decrease, this should be beneficial for clients.

With life insurance, agents are the main distribution channel, responsible for around 60% of premium income. Brokers – mainly focused on group life insurance organised by the employer – are responsible for less than 10% of the market but this figure is growing alongside increasingly popular employee‑funded health insurance programmes. Direct sales account for the remaining 30% of the market.

The non‑life market is slightly different; direct sales are steadily falling and currently account for 15% of total premium income while the brokers share is increasing and is now close to 20%. Agents control over 60% of the market (boosted by individual motor insurance, which is an important part of the market). Corporate insurance is very different and due to the complexity of the risk, is dominated by brokers. Poland’s top 10 corporate brokers handle most of this business.

Employee benefits
The unemployment rate in Poland has continued to fall over the last 15 years and was of 6.9% at the end of 2016. In order to attract potential employees they must be given incentives – most commonly life and health benefits for them and their families. Both types of cover are beneficial for employer and employee. 

Employer‑funded benefits are tax deductible in Poland and health policies reduce levels of sickness absence as they enable employees to talk to and arrange an appointment with health professionals immediately and attend any follow‑up medical examinations. It is compulsory for health policies to provide an occupational health service, which can save time and support HR processes. Benefit programmes were typically offered by large corporations but they are now becoming standard even within small and medium‑sized businesses, especially in large cities with low unemployment rates. 

In the past, employers offering such programmes were recognised as exceptional, but as awareness about benefit programmes has grown, it is very likely that during the interview an employee will ask what the employer will provide. Employers who are keen to recruit and retain suitably qualified professionals should consider introducing quality employee benefit programmes.

Health benefit programmes are the most popular in Poland; between 2015 and 2016 the number of people with health policies grew by almost 27% and the total number insured was 1,48 million people. This increase is in response to public health sector concerns around limited access to specialist doctor consultations and hospital and outpatient procedures. In order for an employee benefit package to be well designed, effective and contribute to long‑term employee satisfaction, it should be developed using an experienced insurance broker.


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