Forecast: insurance market continues to grow rapidly this year due to non-life insurance development

Assessing insurance premiums Lithuanian insurance market increased by 10 percent last year. This year the market will grow more moderately - by 6-7 percent. More rapid development is predicted for non-life insurance market, while the growth of life insurance market will fall, predicts the Bank of Lithuania.

"The growth of all insurance sector will be ensured by the rapid development of non-life insurance sector. Developing economy, growing domestic consumption and inflation will have positive impact for non-life insurance market. Significant structural changes in the insurance portfolio are not expected - mandatory and commercial property insurance products will continue to dominate in non-life insurance market. While predictions for life insurance are opposite. Regulatory and tax changes, prolonged low interest rate environment which leads to declining returns of life insurance products and unusual premiums jump during the last month of 2016 which causes high comperative base will be the reasons predicting negative changes in the life insurance market", says Vytautas Valvonis, the head of Supervision Service of the Bank of Lithuania.

The Bank of Lithuania forecasts that the growth of non-life insurance market which takes two-thirds of all insurance market will be lower than in 2016, but it should be about 10-12 percent. It is not expected that 2017 will be so favorible for life insurance market than it was last year. Insurance premiums could fall by 4-6 percent this year.

Insurance companies registred in Lithuania and branches of insurance companies of EU members signed 709,8 insurance premiums last year and the total growth of all insurance market in 2016 was 10 percent. This broadly matched with the forecast of the Bank of Lithuania.