07/10/2015 10:22
The situation in the life insurances sector shows signs of improvement during the first half of the year.
Latest data by the insurance association of Cyprus shows that the total life insurance premiums during the first half of 2015 increased to €155,9 mn albeit at a small rate of 0,7% from the corresponding 2014 period.
The increase was achieved at the back of a healthy increase in new business which totaled €24,7 mn from €22,6 mn in 2014, a 8,5% growth.
As a result the new business accounted for 15,9% of the total outstanding premiums compared to 14,6% the previous year.
This development suggests that consumers are gradually getting out of the state of "fear" they got into after the dramatic events of 2013 as due to uncertainty and lack of liquidity they avoided getting into long term-contracts which is the nature of the life insurance agreements.
Further reinforcing the situation of improving conditions in the life insurance sector, is the decreasing value of surrenders recorded.
Surrenders show the magnitude of cancellations made due to the holders decision to end their contacts before expiration.
The lack of liquidity after the deposits "haircut" in 2013 led many policy holders to end their contracts prematurely in an effort to firstly find cash and secondly to cut their cash obligations.
The value of surrenders during the first six months of the year reached €69,3 mn a decrease of 10,3% from the same period of 2014.
This resulted in surrenders representing 52,8% of total premiums (excluding new business) compared to 58,5% in 2014.
Surrenders were especially high in big companies with Universal life topping the list, suggesting that policy holders opting for this "solution" are mostly the ones whose policy values are the highest and these are naturally old policies held with the more established companies.
At the same time new policies are being done with these companies as their established names provide relative security to potential customers, with Universal life commanding a relatively high portion of the new business.
All in all, the most notable changes in total premiums during the first six months were those of Allianz Hellas with an increase of almost 26% and Universal life with a decrease of 9,5%.
Latest data by the insurance association of Cyprus shows that the total life insurance premiums during the first half of 2015 increased to €155,9 mn albeit at a small rate of 0,7% from the corresponding 2014 period.
The increase was achieved at the back of a healthy increase in new business which totaled €24,7 mn from €22,6 mn in 2014, a 8,5% growth.
As a result the new business accounted for 15,9% of the total outstanding premiums compared to 14,6% the previous year.This development suggests that consumers are gradually getting out of the state of "fear" they got into after the dramatic events of 2013 as due to uncertainty and lack of liquidity they avoided getting into long term-contracts which is the nature of the life insurance agreements.
Further reinforcing the situation of improving conditions in the life insurance sector, is the decreasing value of surrenders recorded.
Surrenders show the magnitude of cancellations made due to the holders decision to end their contacts before expiration.
The lack of liquidity after the deposits "haircut" in 2013 led many policy holders to end their contracts prematurely in an effort to firstly find cash and secondly to cut their cash obligations.
The value of surrenders during the first six months of the year reached €69,3 mn a decrease of 10,3% from the same period of 2014.
This resulted in surrenders representing 52,8% of total premiums (excluding new business) compared to 58,5% in 2014.
Surrenders were especially high in big companies with Universal life topping the list, suggesting that policy holders opting for this "solution" are mostly the ones whose policy values are the highest and these are naturally old policies held with the more established companies.
At the same time new policies are being done with these companies as their established names provide relative security to potential customers, with Universal life commanding a relatively high portion of the new business.
All in all, the most notable changes in total premiums during the first six months were those of Allianz Hellas with an increase of almost 26% and Universal life with a decrease of 9,5%.
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