The Commissariat des Assurances, Luxembourg's insurance regulator, has announced a decline in premiums and results for the sector in 2015.
In terms of payments received diverging trends between branches observed since the beginning of the year continued in the fourth quarter: the collection of non-life branches continued to grow at 5.82% compared to Q4 2014 while life insurance premiums decreased by 4.25% from the corresponding quarter of the previous year.
Given the first three quarters performance throughout the year recorded a decrease in premiums of 8.51%: non-life branches grew by 9.15%, while those of life insurance decreased by 10.78%. With a total collection of €24.83 billion, the fiscal year 2015 will nevertheless remain the second best performance of all time.
The figures of the last quarter of 2015 also point to a decline of 19.51% of the results of the direct insurance sector: with a €323.11 million profit can be compared against the record of €401.42 million recorded in 2014, but also compared to €338 million in 2013.
In life insurance the decline of 10.78% of the annual inflows masks divergent developments depending on the type of product, this regression including a decrease of 41.86% of the collection on guaranteed return products faced an increase of 16.47% from that of life products units. The return to the unit-linked products, the traditional spearhead of the Luxembourg life insurance market, marks a complete reversal from the trends observed in 2013 and 2014, the decline in guaranteed returns explained partly by lower yields likely to be offered and partly by a deliberate shift of customers towards products where the investment risk is not borne by the insurer.
The evolution of traditional products is influenced by pension savings products under Article 111a of the Law on income tax: approximately 66,150 contracts - an increase of 5.34% compared to 2014 - generated a cash inflow of €91.46 million, 4.05% more than in 2014. The profit amounted to €751 million at the end of 2015.
Total technical reserves of life insurance amounted to €148.75 billion at the end of 2015, an increase of 9.15% compared to end 2014 and 4.10% compared to the end of September 2015.
With €225.99 million profit after tax, the level is close to that of 2013 but was down by 14.20% compared to the prior year favourably impacted by an exceptional operation.
Non-life insurance - excluding marine insurance in Q4 - rose 9.15%. Insurance companies working primarily, if not exclusively on the Luxembourg market, significantly increased faster than inflation with premium growth of 4.55%. With an increase of 10.17% from their premium collection, companies operating abroad in non-life insurance excluding marine insurance regained their former dynamism. Marine insurance, for which only data is available only from the first three quarters, and which is essentially the result of a few large mutuals whose premium collection reflects loss development increased by 14.46% during this period.
With a surplus after tax estimated at €97.12 million, the result of the Luxembourg non-life insurance companies excl. marine insurance decreased by 29.64% compared to 2014.
The number of people employed in the direct insurance business rose significantly to 4,911 people at the end of 2015, an increase of 472 units compared to 2014. Most of this increase (332 units) comes however from the adoption of a new method of allocation of staff from a major player. With €182.44 million, direct taxes have increased by 41.09% compared to 2014.
The figures for premiums, taxes, and the results are for the only companies controlled by the Commissioner of Insurance; therefore excluded from the Luxembourg branches of insurance are companies from other countries of the European Union regarding which all data for 2015 will not be known until later.
