Czech Republic
Czech insurance market
The insurance market in the Czech Republic continued to be dominated by the top 5 insurance groups in 2020, which together continue to generate around 83% of total premium volume.
Market growth in the 1ST to 3RD Quarters of 2020 compared to the previous year
Source: Czech Insurance Association
The growth of the Czech insurance market continued in the first nine months of 2020, in spite of the COVID-19 pandemic. Premium volume rose 3.6% year-on-year (based on the calculation method of the Czech Insurance Association ČAP) from CZK 102.4 billion to CZK 106.1 billion. The increase was due to growth in both the non-life and life sectors.
Premiums rose 4.4% in the non-life sector. The increase was driven by gains in the dominant lines of business in this sector, namely motor third party liability (+7.4%) and motor own damage insurance (+7.0%). Both lines continue to benefit from a growing number of newly insured vehicles and rising prices. The non-motor lines of business recorded a moderate increase of 1.4%.
The life insurance sector recorded year-on-year growth of 2.0% in the 1st to 3rd quarters of 2020. This sector is dominated by regular premium life insurance, which generated an increase of 2.7%, while the considerably smaller single premium business fell strongly by 19.6%.
According to Axco Global Statistics, a per capita average of EUR 576 was spent on insurance premiums in the Czech Republic in 2019. EUR 383 of this amount was for non-life insurance and EUR 193 for life insurance.
Market shares of the major insurance groups
Source: Czech Insurance Association; as of 9M 2020
VIG companies in the Czech Republic
VIG Insurance Group is represented by two companies, Kooperativa and ČPP, in the Czech Republic.
The 30.7% market share made it the largest insurance group in the Czech Republic in the 1st to 3rd quarters of 2020. VIG Insurance Group also held 1st place in the life insurance sector, and second place in the non-life sector.
The Group reinsurance company VIG Re, which has its headquarters in Prague, is assigned to the Central Functions segment.
Financial performance indicators in the Czech Republic segment
Premiums by line of business
Values for 2019 in parentheses
Premium development
Premiums written in the Czech Republic segment remained almost unchanged at EUR 1,732.4 million in 2020 (2019: EUR 1,745.8 million). The small decrease of 0.8% was mainly due to negative exchange rate effects. After adjusting for this effect, the Czech Republic segment recorded an increase of 2.2% in premiums written. Net earned premiums were EUR 1,295.5 million in 2020, representing a decrease of 1.3% compared to the previous year.
Result before taxes
A result before taxes of EUR 192.1 million was recorded in the Czech Republic segment in 2020 (2019: EUR 172.5 million). This represents an 11.4% year-on-year increase, which primarily resulted from an improved underwriting result in the life insurance as well as a positive development in the combined ratio.
Combined ratio
Due to significantly higher reinsurance commissions in the motor lines of business, the combined ratio continued to decline compared to the previous year to an excellent 90.7% in 2020 (2019: 92.0%).