OREANDA-NEWS. Since early 2016 insurance undertakings in Lithuania, as those across the European Union (EU), working in a new legal environment, have managed to maintain strong, albeit weaker, market growth rate. In the first quarter, the volumes of insurance premiums of undertakings registered in our country and of those that came from other EU countries amounted to EUR 159.2 million and were by 5.6 per cent higher than in the same period last year, when their year-on-year growth was 6.9 per cent.

‘This year is the beginning of essential changes across the EU insurance sector. The good news for the market and participants is that domestic insurance undertakings comply with the new risk assessment-based requirements of the Solvency II Directive, effective from early this year, and hold sufficient own funds to absorb unexpected losses should they occur due to catastrophes, investment depreciation, mismatch between assets and liabilities, cost increases or default on reinsurers’ liabilities,’ says Mindaugas ?al?ius, Deputy Director of the Prudential Supervision Department of the Supervision Service at the Bank of Lithuania.   

He noted that, in the first quarter of 2016, the increase in the non-life insurance market in Lithuania of over 10 per cent was the fastest in the recent decade and offset the quite marked decrease in the life assurance market in the first quarter. Premiums written in the non-life insurance market amounted to EUR 110.3 million. Compared to changes in the initial quarters of the previous year, only asset insurance premiums grew at a similar rate, while crop and livestock insurance posted the strongest growth rate among this type of products. 

EUR 48.9 million in premiums were written in the life assurance market over the first quarter of 2016, a decrease of 3.4 per cent year on year. The life assurance share in the general composition of the insurance market’s premiums contracted to 30.7 per cent, a drop of nearly 6 p.p. according to the data as of 31 December 2015. 

Insurance undertakings registered in Lithuania have from early 2016 migrated to the International Accounting Standards and now manage their accounting and prepare financial statements according to them. According to their statements, as of 31 March this year, the equity capital of insurance undertakings amounted to EUR 241.9 million, an increase of 2.8 per cent from late 2015. Equity capital, according to the data as of 31 December 2015, grew by almost 20 per cent in volume due to changed accounting standards.

As of 31 March 2016, the profits of undertakings registered in Lithuania amounted to EUR 1.4 million. The profits of life assurance undertakings equalled EUR 4.4 million, while non-life insurance undertakings operated at a loss, amounting to almost EUR 3 million. Compared to the adjusted operating result for the first quarter of 2015, the profits earned by undertakings were lower by nearly 69 per cent. As of 31 March 2015, the calculated operating result of life assurance undertakings — profit — fell from EUR 5.1 million to EUR 3.6 million due to changed accounting standards. Changes in the non-life insurance market were more significant and were driven by not only changed accounting standards but the changed comparable database as well.

As of 31 March 2016, insurance services were provided by 23 insurers, o/w 9 undertakings and 14 branches of undertakings registered in other EU countries.