The insurance market is maturing

This is what statements by participants of the panel "2021 perspectives for the insurance industry – opportunities and threats" at the Karpacz Economic Forum could be construed to indicate. The panellists discussed whether this trend will continue into 2021 and how the pandemic will affect the sector in the long to medium term.

There is potential in the market

Jan Grzegorz Prądzyński, President of the Polish Chamber of Insurance, pointed out that after the pandemic, Poles have become more concerned about the death and illness of their loved ones, as well as about the lack of money for the treatment of serious illnesses.

"These concerns are the same regardless of age, gender and location. This is why sales of life and health insurance policies are on the rise. Motor vehicle insurance sales are also rebounding and returning to pre-pandemic levels following their earlier decline", Mr Prądzyński explained. In this case, however, there is a massive increase in claim handling costs due to rapidly increasing auto part and labour costs.

Małgorzata Sadurska, Management Board Member at PZU, said that the pandemic has changed the way insurance companies work, but most of all, it has increased insurance awareness among customers. She emphasized that despite the more difficult financial situation of many families, Poles did opt out of insurance. Conversely, they recognised the value of insurance as a means of ensuring financial and health security for themselves, their families, and in the case of entrepreneurs, also for their employees and business.

"This is also evidenced by PZU's results in the first half of this year, when gross premiums written totalled a record PLN 12.3 billion and the policy sales increased both in life and non-life insurance areas", Małgorzata Sadurska remarked.

Yet this is not the whole story. "Today, Poland ranks 14th in terms of insurance market size. In Spain, which is similar in many respects, the insurance premium collected each year is more than four times higher. This shows the potential our market still has. However, a lot of work is needed from all insurers to build awareness among Poles from the youngest age on how vital insurance protection is", said Ms Sadurska.

Customers still prefer face-to-face service

Radoslaw Sierpinski, President of the Medical Research Agency, highlighted the problems of public health care, which is becoming increasingly inefficient and unable to keep up with the surging demand for medical services – a trend that has begun with the pandemic and continues to this day.

"This is reflected by the rapidly growing health insurance sales, and this trend will continue", said Mr Sierpinski. He believes that Polish health care should be transformed into a system in which universal health insurance is complemented by private insurance.

Robert Zapotoczny, president of PFR Portal PPK, agreed with this idea, pointing out that such cooperation between the state and the private financial market proved successful in the case of the Employee Capital Plans programme. "We have established a new system for additional savings. It was introduced during an extremely difficult pandemic period. However, I believe that the next enrollment year – 2023 – will see an even greater interest in this solution", he explained.

Mateusz Litewski, Regional Head CEE of the Estonian Cachet startup, also pointed to the increasing role of digital channels in insurance.

"The importance of the online channel will continue to increase, but it will not become the most dominant channel in insurance. This is evidenced by both Polish and foreign experiences. Many customers are elderly persons who need to meet an employee or agent in person. However, PZU's youngest customers who typically never put their smartphones away also feel hesitant when dealing with financial services, and as such, they initially prefer face-to-face contact and advice", Małgorzata Sadurska explained.