Baltic states
The Baltic states consist of the countries Estonia, Latvia and Lithuania.
The Baltic insurance market
The insurance market in the Baltic states is characterised by many companies that have their registered office in one of the three countries and also operate via branches in the other two markets. This leads to an above-average number of market participants. The five largest insurance groups in the Baltic states generated around 80% of the total premium volume.
Market growth in the 1ST to 3RD Quarters of 2020 compared to the previous year
Source: The Estonian National Statistics Board, Latvian Supervisory Authority, Latvian Insurers Association, Central Bank of the Republic of Lithuania
The Baltic states recorded a small year-on-year decrease of 1.1% in premium volume in the first nine months of 2020. The Lithuanian insurance market experienced moderate growth of 0.6%, while premium volume decreased in Latvia (-0.6%) and Estonia (-4.7%). With a 48.3% share of total premium volume, Lithuania generated close to half the premiums in the Baltic states.
Premium volume declined 3.6% in the non-life sector in the 1st to 3rd quarters of 2020. The biggest drop was recorded by the Latvian insurance market (-4.7%), followed by Estonia (-4.3%) and Lithuania (-2.5%).
The life insurance sector recorded an increase of 6.7% in the first nine months of 2020. Within the Baltic states, Latvia recorded the largest increase in life insurance premiums, with a gain of 11.1%, followed by Lithuania (+8.6%). Estonia, on the other hand recorded a drop of 6.2%.
The average per capita expenditure for insurance in Lithuania was EUR 343 in 2019. EUR 257 of this amount was for non-life insurance and EUR 86 for life insurance. Estonia’s insurance density of EUR 373 per capita was higher than in Lithuania. EUR 306 of this amount was spent on non-life insurance and EUR 67 on life insurance. Latvia had the lowest insurance density in the Baltic states, namely EUR 292. EUR 225 was for the non-life sector and EUR 67 for the life sector.
Market shares of the major insurance groups
Source: The Estonian National Statistics Board, Latvian Supervisory Authority, Latvian Insurers Association, Central Bank of the Republic of Lithuania; as of 9M 2020
VIG companies in the Baltic states
VIG insurance companies are represented in all three Baltic states. Compensa Life has its headquarters in Estonia and is also represented by branches in Latvia and Lithuania. BTA Baltic operates in Latvia and has branches in Estonia and Lithuania. After merging in 2020, the non-life companies Compensa Non-Life and Seesam operated in Lithuania as a single company, Compensa Non-Life. It maintains branches in Latvia and Estonia, and operates under the Seesam brand in Estonia.
Their market share of 25.0% makes the VIG insurance companies the market leader in the Baltic states. They also hold first place in the non-life sector and third place for life insurance.
Financial performance indicators in the Baltic states segment
Premiums by line of business
Values for 2019 in parentheses
Premium development
The Baltic VIG insurance companies generated EUR 492.9 million in premiums written in 2020, representing a year-on-year decrease of 1.5% (2019: EUR 500.3 million). The decrease was mainly due to the motor lines of business. Net earned premiums rose to EUR 393.3 million in 2020 (2019: EUR 385.2 million).
Result before taxes
The result before taxes rose 24.1% year-on-year to EUR 9.5 million in the Baltic states segment in 2020 (2019: EUR 7.7 million). This development resulted primarily from the strong improvement in the health insurance business and an improved combined ratio.
Combined ratio
The combined ratio improved compared to the previous year to 97.2% (2019: 97.7%).