Baltic, Financial Services, Insurance

In the first half-year, ERGO customers in the Baltic countries were paid over 8.3% more claims compared with last year (EUR 45.8 million in 2012, EUR 42.3 million in 2011), Nozare.lv was informed by the company, writes LETA/ELTA.

According to ERGO Insurance Group Chairman Kestutis Bagdonavicius, gradual and moderate recovery of the Baltic countries economy revitalized the insurance market. “The stabilization of the economic situation, prudent underwriting policy as well as solutions, which were implemented timely and consistently according to the market situation – these are the reasons for managing increase in profit and premiums. All ERGO Insurance companies in the Baltic States regardless of the challenging economic environment achieved excellent results, which comply with the profitable growth strategy of the ERGO Insurance Group in the Baltic States”, points out Bagdonavicius.

The premiums growth in the non life insurance segment (EUR 53.9 million in 2012, EUR 49.9 million in 2011) was achieved due to recovery of key LoB, Motor and Property. In the first two quarters of the year, ERGO in Latvia and Lithuania experienced growth in MOD by more than 30%, whereas ERGO in Estonia reported a 24.3% boost for MTPL. Good results were also obtained in the health and life insurance segments – ERGO in every country has outperformed market totaling more than EUR 18.5 million written premiums (EUR 15.9 million in 2011). The highest premium growth in health insurance segment was reported in Estonia (37%). Latvia leads by life insurance premiums, which represents a 38% year-on-year growth.

The positive result of EUR 5.04 million profit complies with the profitable growth strategy of the ERGO Insurance Group in the Baltic States. ERGO enhanced its financial strength and stability even more: in 2012 investment portfolio of ERGO in the Baltic States grew to EUR 348 million (EUR 312 million in 2011).

In the half year ERGO customers in the Baltic countries were paid over 2.1% more of non-life insurance claims compared with last year and 30.7% of life insurance claims. The biggest indemnity paid out in the half year in Lithuania was more than EUR 0.78 million to compensate the restoration of a house struck by fire in Lithuania. In Estonia three biggest claims exceeded EUR 0.5 million per each – two property claims and one transport claim. The biggest claim in Latvia was EUR 0.1 million for a stolen pit excavation tractor.

The subsidiaries of the ERGO Insurance Group in the Baltic States – ERGO in Belarus, ERGO Invest and ERGO Funds – earned more than EUR 314 thousand profit.

Commenting the forecasts of ERGO Insurance Group in the Baltic States, Bagdonavicius emphasizes that future perspectives seem good and promising. “The long term growth perspective in the Baltic States is quite positive, though the need to focus on efficiency is very high. During the next years, the insurance market is likely to face consolidation – this means that the Baltic countries will have fewer insurance companies in the future, and undertakings will be able to operate more efficiently and with optimized costs, thus offering coverage for a lower premium, however, we must always remain vigilant as we see some forecasts about the second potential wave of economic downturn”, says Bagdonavicius.