The fourth quarter of 2018 confirmed the recovery of the insurance sector in Luxembourg.

In terms of inflows, direct insurance figures for the fourth quarter of last year confirmed the recovery initiated in the previous quarter: the inflow of non-life insurance branches continued to grow by 18.84% compared to the fourth quarter of 2017 and life insurance premiums increased by 6.45% compared to the same period the previous year. Taking into account the performance of the first three quarters, the whole year saw a rise in premiums of 3.63%: non-life branches grew by 20.88%, while those of life insurance grew by 0.99%.

The figures for the last quarter of 2018, however, show a significant decline in the results of the direct insurance sector: with €331.46 million, profits are down 32.65% compared to €492.17 million in 2017 and are close to the level of €338.99 million registered in 2014. Similarly, having declined compared to 2017 since the second quarter, life insurance inflows recorded a modest increase of 0.99% for the whole year, breaking down into a growth of 38.85% of the inflow relative to guaranteed return products against a 10.86% decline in unit-linked life products. An analysis of the different quarters of 2018 showed that the preference for guaranteed products was constant throughout the year and that, except for the last quarter, the inflow of unit-linked products was down.

The evolution of conventional products was found to still be influenced by pension savings products under Article 111bis of the Income Tax Act which have increased significantly: the approximately 96,102 contracts (+17.98% compared to 2017) generated an inflow of €137 million, or 15.45% more than in 2017. Savings managed in this way amounted to €995 million at the end of 2018. Meanwhile, life insurers' total technical reserves amounted to €176.84 billion at the end of the year, up 2.11% compared to the end of 2017 but down 2.10% compared with the end of September 2018. With €255.15 million, the result after tax is down 13.14% compared to that of 2017.

For its part, non-life insurance (excluding marine insurance in the fourth quarter) rose by 20.88% over the twelve months of 2018. This increase continues to be significantly impacted by the decision of companies to set up in Luxembourg following the decision of the United Kingdom to leave the European Union. With a 35.70% increase in their premiums, companies operating abroad in non-life insurance lines, excluding marine insurance, made significant progress. Marine insurance for which only data for the first three quarters are available and which is essentially the work of a few large mutuals whose inflow reflects the evolution of claims fell by 20.88% during this period. With an after-tax surplus estimated at €76.30 million, the result of Luxembourg non-life insurance companies, excluding maritime insurance in the fourth quarter, fell by 61.56% compared to that of 2017. An important part of this decrease is the result of the start-up costs of British companies that joined Luxembourg because of Brexit.