Insurance policy prices drop on growing competition

11-05-2007, 15:44

The Poles buy more and more insurance policies and the premiums they pay drop. Insurers warn that the price war may have dramatic results.

Last year, insurance companies sold 10m more policies in the non-life business and the premium revenue increased to PLN 16.05 billion (EUR 4.3 billion) from PLN 15.33 billion. The average premium is falling, however.

“Strong competition makes us cut prices”, Michal Gomowski, Generali member of the board said.

“The price war is irrational. It causes very serious decrease of the premiums as compared to last year”, Anna Katarzyna Wojciechowska, Commercial Union Polska TUO CEO added.

Despite falling premiums, insurers keep improving their financial results.

“Further decrease of premiums will be dangerous for some insurers, and in consequence for their clients”, Zbigniew Jeksa from TU Allianz believed.

The price war in policies for companies is dangerous.

“Fire, construction and cargo insurances are the most competitive ones. If the price decrease continues, the market may start making losses in this business”, Anna Katarzyna Wojciechowska said.

Unofficially, insurance companies’ employers admit that premiums have fallen so much it will be difficult to cover damages in case of a fire in a big company, a flood or hurricane.

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