European Insurance Overview 2020 - Eiopa

1 European Insurance Overview 2020 Solo undertakingsYear-end 2019 978-92-9473-277-4 978-92-9473-270-52599-8323 : Publications Office of the European Union, 2020 Eiopa , 2020 Reproduction is authorised provided the source is any use or reproduction of photos or other material that is not under the Eiopa copyright, permission must be sought directly from the copyright Insurance Overview 2020 Solo undertakingsYear-end 2019 ABBREVIATIONSC ountriesATAustriaBEBelgiumBGBulgariaCYCy prusCZCzech RepublicDEGermanyDKDenmarkEEEstoniaFIFin landFRFranceESSpainGRGreeceHRCroatiaHUHu ngaryISIcelandIEIrelandITItalyLVLatviaLI LiechtensteinLTLithuaniaLULuxembourgMTMa ltaNLNetherlandsNONorwayPLPolandPTPortug alRORomaniaSKSlovakiaSISloveniaSESwedenU KUnited KingdomGeneralCICC omplementary Identification CodeCQSC redit Quality StepEPIFPE xpected profit in future premiumsEOAE xcess of assets over liabilitiesGWPG ross written premiumsGeneralLACDTLoss absorbing capacity of deferred tax assetsLTGLong term guaranteesMCRM inimum capital requirementEOFE ligible Own funds to meet the SCRSCRS olvency capital requirementNon-Life lines of businessAssistanceAssistanceC&SCredit and Suretyship insuranceCasualty ReinsCasualty non-proportional reinsuranceFire PropFire and

2 Other damage to property insuranceGen LiabilityGeneral liability insuranceHealth ReinsHealth non-proportional reinsuranceInc ProtectIncome protection insuranceLegal ExpLegal expenses insuranceM ATMarine, aviation and transport insuranceM AT ReinsMarine, aviation and transport reinsuranceMed ExpMedical expense insuranceMisc FinMiscellaneous financial lossMotor LiabMotor vehicle liability insuranceOther MotorOther motor insuranceProperty ReinsProperty non-proportional reinsuranceWorkers CompWorkers compensation insuranceLife lines of businessAnnuities, healthAnnuities stemming from non-life Insurance contracts and relating to health Insurance obligationsAnnuities, non-healthAnnuities stemming from non-life Insurance contracts and relating to Insurance obligations other than health Insurance obligationsHealth InsHealth insuranceHealth ReinsHealth reinsuranceIL & ULIndex-linked and unit-linked insuranceIns with ppInsurance with profit participationLife ReinsLife reinsuranceOther LifeOther life insuranceEUROPEAN Insurance Overview 2020 2 CONTENTSABBREVIATIONS 21.

3 INTRODUCTION 42. LIFE MARKET Overview Life Lines of Business Life EEA Premium breakdown 83. NON-LIFE MARKET Overview Non-Life Lines of Business Non-Life EEA Premium breakdown 144. SOLVENCY & CAPITALISATION SCR and MCR distribution BSCR composition Standard formula users Tiering of own funds Impact of loss absorbing capacity of deferred taxes (LAC DT) and expected profits included in future premiums (EPIFP) SCR and MCR coverage Long Term Guarantees and Transitional Measures 245. INVESTMENTS Asset type breakdown Credit Quality Location of Investments Use of Derivatives Sector distribution 31 SOLO UNDERTAKINGS YEAR-END 201931. INTRODUCTIONThe Annual European Insurance Overview is published by Eiopa as an extension of its statistical services in order to provide an easy-to-use and accessible Overview of the Eu-ropean (re) Insurance sector. The report is based on annually reported Solvency II infor-mation.

4 This ensures that the data has a high coverage in all countries and is reported in a consistent manner across the report is objective, factual and data driven and does not contain analysis or policy messages. All indicators used in the report are calculated from the reported data from undertakings. While the topics and indicators covered is intended to be relatively stable over time, the report will be adapted to respond to changes in micro prudential and supervisory priorities. It will therefore support the supervisory community and industry with highly relevant and easily-accessible data at European level. This report is based on Annual reporting for 2019 and as such UK data are included in any EEA figures. Only countries with more than 3 undertakings will be displayed in charts with report is published with all charts data available for download in separate excel Insurance Overview 2020 42.

5 LIFE MARKET OVERVIEWFor the majority of EEA countries (19) GWP increased in 2019. The Life market remains largely dominated by the Index-linked and Unit-linked Insurance & Insurance with profit participation lines of 1: Concentration per country10 Undertakings5 Undertakings3 Undertakings0%10%20%30%40%50%60%70%80%90 %100%ATBEBGCYCZDEDKEEESFIFRGRHRHUIEISITL ILTLULVMTNLNOPLPTROSESISKUKThe concentration indicator is a measure of the market share of the national GWP that the 3, 5, and 10 biggest premium writers account 2: Aggregate GWP growth per countryLife GWP 2018 Life GWP 2019 Delta-50%-30%-10%10%30%50%70%90%110%130% 150%-100-60-202060100140180220260300 UKFRDEITIEESLUDKSEBENLNOATPTFIPLLIMTGRCZ HUSKSIROHRCYEEBGLTLVISB illionsThe aggregated GWP for both 2018 and 2019 are displayed per country (left axis). Delta displays the increase/decrease in % GWP of this year compared to last on the right , IS, LT & LV all show a 3 undertaking market concentration above 80%.

6 This is a result of the small number of companies in these , DE remains as the least concentrated country followed by IT, IE & , FR, DE & IT continue to be the largest Life have the largest increase year on year at 147%; with FI reporting the second largest increase at 38%.LT have the largest decrease at -24%.SOLO UNDERTAKINGS YEAR-END 20195 Figure 3: Distribution of GWP growth per countryATBEBGCYCZDEDKESFIFRGRHRHUIEISITL ILTLUMTNLNOO therPLPTROSESISKUK-40%-20%0%20%40%60%80% 100%120%140%The year on year growth in GWP is the increase or decrease in premiums written this year compared to last. The chart shows interquartile range and medianFigure 4: Share of reinsurance per LOBA nnuities, health Annuities, non-health Health insuranceIL & UL Ins with PPOther life insurance0%10%20%30%40%50%60%70%80%90%10 0%Defined as the percentage of GWP ceded to reinsurers. The chart shows interquartile range and countries (AT, GR, MT, NL & UK) had a reduction in GWP at median level with UK s contraction of ~4% being the Annuities LOBs are substantially more reinsured than any other Life line of business.

7 IL&UL is the least Insurance Overview 2020 6 Figure 5: Year on year growth in GWP by line of businessAnnuities, healthAnnuities, non-healthHealth InsHealth ReinsIL & ULIns with PPLife ReinsOtherlife-20%-10%0%10%20%30%40%The year on year growth in GWP is defined as the total GWP for this year divided by the same figure for the preceding year, minus one. The chart shows interquartile range and LIFE LINES OF BUSINESSF igure 6: Life Line of business split per country based on GWPH ealth InsIns with PPIL & ULAnnuities, healthAnnuities, non-healthHealth ReinsLife ReinsOther life0%10%20%30%40%50%60%70%80%90%100%ATB EBGCYCZDEDKEEESFIFRGRHRHUIEISITLILTLULVM TNLNOPLPTROSESISKUKT otal (ALL)The volume of GWP by line of business for each country expressed as a percentage of total 3 out of 8 line of business ( Annuities non-health , Health Ins & Other life ) display an increase at the median LOB has decreased by more than 2% at a median At an EEA level, the Ins with PP and IL & UL lines of business account for ~70% of 17 countries have a single line of business accounting for 50% or more of MT the life market is dominated by reinsurance LOBsSOLO UNDERTAKINGS YEAR-END LIFE EEA PREMIUM BREAKDOWNF igure 7.

8 Life Gross written premiums divided by GDPThe location of underwriting for any Life business written by all undertaking and their EEA branches, including by FOE and FPS, within the EEA. GDP figures sourced from 8: Life Lines of Business by premium volumeIns with PP33%MotorLife9%Health1%Direct BusinessReinsuranceOther life13%Health Ins7%IL & UL 36%The total life market split into lines of business by premium volume. Split between direct business and reinsurance LU(~10,500) & IE(~5,000) have the highest proportion of Life GWP per IL & UL and Ins with PP are the dominant lines of business in the life market accounting for almost 70% of Annuities, health(<1%) and Annuities, non-health(<1%) are not visible in the Insurance Overview 2020 83. NON-LIFE MARKET OVERVIEWNon-Life GWP has increased for the vast majority of countries (27) in 2019. More than 50% of the Non-life market is made up of General Liability, Motor Vehicle Liability, Medi-cal Expenses insurances & Fire and other damage to property Insurance lines of 9: Concentration per country10 Undertakings5 Undertakings3 Undertakings0%10%20%30%40%50%60%70%80%90 %100%ATBEBGCYCZDEDKEEESFIFRGRHRHUIEISITL ILTLULVMTNLNOPLPTROSESISKUKThe concentration indicator is a measure of the market share of the national GWP that the 3, 5, and 10 biggest premium writers account 10: Aggregate GWP growth per countryNon-Life GWP 2018 Non-Life GWP 2019 Delta-10%0%10%20%30%40%50%60%70%80%90%10 0%0-2020406080100120140160180200 DEFRUKNLESITIEBELUSEATPLDKNOPTCZFIMTLIBG SIGRHUROSKHREECYISLTLVB illionsThe aggregated GWP for both 2018 and 2019 are displayed per country.

9 Delta displays the increase/decrease in % GWP of this year compared to , LI, LV & LT show a 3 undertaking market concentration above 80%. Such high levels of concentration are attributable to the relatively few companies in each least concentrated market is FR followed by DE, CY, GR and , FR & UK are the largest Non-Life of ~77% is observed for LU. BE at 41% have the second largest , CY & FI are the only countries to display decreases in premium at -9%, -3% and -1% UNDERTAKINGS YEAR-END 20199 Figure 11: Distribution of GWP growth per country-20%-15%-10%-5%0%5%10%15%20%25%30 %ATBEBGCYCZDEDKESEEFIFRGRHRHUIEISITLILTL ULVMTNLNOPLPTROSESISKUKThe year on year growth in GWP is the increase or decrease in premiums written this year compared to last. The interquartile range is displayed. The chart shows interquartile range and medianFigure 12: Year on year growth in GWP per line of business-50%-40%-30%-20%-10%0%10%20%30%4 0%AssistanceC&SCasualty ReinsFire PropGen liabilityHealth ReinsInc protectLegal ExpMATMAT ReinsMed ExpMisc FinMotor LiabOther MotorProperty ReinsWorkers CompThe year on year growth in GWP is defined as the total GWP for this year divided by the same figure for the preceding year, minus one; for each line of business.

10 The chart shows interquartile range and medianMedian growth of ~15% is observed for CZ & HU. HR, PL & SI show a median value above 10%.Only LI & UK show a decrease in GWP volume at a median level this year with a decline of ~2% & ~1% Casualty Reins displays a decrease in premium volume at a median level of ~1%.The biggest increase is observed in Assistance & Other Reins has by far the largest interquartile range of Insurance Overview 2020 10 Figure 13: Combined ratio per country0%20%40%60%80%100%120%140%160%ATB EBGCYCZDEDKEEESFIFRGRHRHUIEISITLILTLULVM TNLNOPLPTROSESISKUKThe Combined Ratio is defined as the sum of claims and expenses divided by premiums earned. The chart shows interquartile range and 14: Claims ratio per countryATBEBGCYCZDEDKEEESFIFRGRHRHUIEISI TLILTLULVMTNLNOPLPTROSESISKUK0%10%20%30% 40%50%60%70%80%90%100%The claims ratio is defined as the claims paid divided by premiums earned. The chart shows interquartile range and CY, IS, NO, RO & UK display median combined ratio values at or above 100%.