This blog is part of the Pillar 3 Reporting series. For more blogs in this series click here.
Following the first annual reporting deadline under Solvency II, I look at premium income figures as reported by Irish insurance companies.
The figures below are based on an analysis of 47 Solvency and Financial Condition Reports (SFCRs), which cover all the major Irish-domiciled insurers.
Based on the SFCRs in our analysis, total premiums received in respect of life business during 2016 were €40.2 billion. This reflects all premiums, including both new business and regular premiums and top-ups on existing business, and is gross of outward reinsurance. We believe this represents approximately 85% of the total Irish-domiciled market, implying total premiums of approximately €47 billion.
Cross-border companies are an important feature of the Irish insurance market and this is reflected in the premium figures, with 68% of premiums written outside of Ireland and the remaining 32% written in Ireland.
The majority of cross-border business written from Ireland is written in the Italian market. Almost three-quarters of cross-border premiums in 2016 were to the Italian market. The next largest cross-border life market is the UK, with 11% of cross-border premiums.
In terms of types of business sold, there is a wide range of business sold by Irish life insurers. While the SFCR disclosures don’t necessarily disclose the exact details of products sold, they do provide a breakdown of premiums by Solvency II line of business. It should be noted that a single product may be unbundled across several lines of business in these statistics e.g., a unit-linked product with a return of premium guarantee will be split across ‘unit-linked’ and ‘other life insurance.’
Perhaps not surprisingly, life premiums are dominated by unit-linked business (82.6%). Of the remainder, reinsurance business accounts for over 14% between life and health business, reflecting Dublin’s position as a centre for reinsurance.
Please note that private health insurance is classified under non-life business and health insurance here refers to products such as long-term care.
Based on the nine SFCRs in our analysis, gross written premiums in the domestic non-life market were €2.6 billion in 2016 (direct writers only). We believe this represents approximately 75% of the total market, implying total premiums of approximately €3.5 billion.
It is worth noting that these premium figures are based on those companies authorised in Ireland. Thus they do not include figures for companies such as AIG and Aviva which are significant players in the Irish motor and property markets, but have their head offices in another EU country. Similarly these figures would not include Laya Healthcare on the health insurance side, as Elips Insurance Limited (trading as Laya Healthcare) is based in Liechtenstein.
The graph below looks at the split of non-life premiums during 2016 by Solvency II line of business. As above, a single product may be unbundled across several lines of business in these statistics, i.e., a motor insurance premium may cover several perils including motor vehicle liability and other motor insurance.
As you can see, the non-life premiums are split across a wide range of lines of business, with the biggest contributors being:
• Fire and other damage to property (25%)
• Motor vehicle liability insurance (22%)
• General liability insurance (17%)
• Medical expense insurance (15%)