Luxembourg’s insurance regulator, the Commissariat des Assurances, has said that the fourth quarter results for direct insurance fell short of the hopes generated by the previous quarter’s results. The relatively disappointing results came on the back of a 12.6% reduction in life insurance premiums compared to the fourth quarter of 2015.
The whole year saw a 2.83% reduction in premiums, and a decrease of 3.83% in life insurance, although non-life branches rose by 3.6%.
That said, direct insurance profits increased 2.6% to €338.99 million, though they remained well below the 2014 record of €399.28 million.
The 3.38% life insurance decline masks diverging trends within the products on offer, said the report. Life insurance products registered a 2.36% increase, while unit-linked products saw a 6.62% decrease in receipts reflecting a downward trend that persisted across the whole year. Life insurance, by contrast, saw a slight decline in the first quarter before rising sharply for the second and third, and then falling slightly again in the fourth.
Pension savings products created under Article 111bis of the Income Tax Act continue their influence have increased significantly, generating approximately 73,325 contracts in 2016, an increase of 85% on the year before, and receipts of €101.07 million, representing a 10.51% increase. Savings under this heading amounted €839 million a the end of 2016.
Total life insurers' technical reserves amounted to €160.25 billion at the end of 2016, an increase of 7.63% compared to the end of 2015 and a 3.67% increase compared to the end of September 2016.
At €213.01 million, the result after taxes is down 8.79% against 2015.
Non-life insurance — excluding marine insurance in the fourth quarter — saw a 3.60% increase. Insurers operating chiefly, if not exclusively, in Luxembourg saw their receipts increase significantly faster than inflation with premium growth of 14.27%. Those working abroad in the non-life — non-marine — insurance sectors saw a contrasting growth of 0.25%.
Marine insurance, which is largely covered by a few mutuals, saw a fall of 1.42% in receipts over the first three quarters, the only period for which data were available.
With a €125.98 million after-tax estimated surplus, the profit of non-life insurance companies in Luxembourg excluding marine insurance rose by 30.05% compared with 2015, but remains far from returning to the profitability levels seen at the beginning of the decade.
Employment within the sector increased by 422 to 5,200 by the end of 2016, much of it linked to a Luxembourg operator with a large number of branches abroad. Direct taxes, at €144.48, are down 20.91% compared to 2015.
The figures presented by the Commissariat relate only to direct insurance undertakings controlled by the regulator; reinsurance companies and the Luxembourg branches of insurance companies from other EU countries for which data are not available until later are excluded.
