Luxembourg insurance sector feels the first fallout from Brexit
Photo: Paper jam archives
The first quarter of 2018 saw Luxembourg’s insurance sectors record positive growth, maintaining the upward trend of 2017, Luxembourg insurance regulator CAA reported on 4 May 2018. Across all business lines, premiums rose by 10.11% in comparison with the same period last year.
Specifically, life insurance business increased by 4.35% compared to the first quarter of 2017 and premiums in non-life insurance increased by 45.71% for the same period.
In a communiqué issued by the government it was explained that, “In life insurance, the quarterly increase of 4.35% masks divergent and large-scale developments according to the types of products.”
For products with guaranteed returns, premiums are up 37.16% compared to the same quarter last year and, contrary to similar increases in the past, this time it is due primarily to a large increase in pure protection products and not to savings operations, the communiqué clarified.
Growth in guaranteed return products was partially offset by a 7.79% decline in unit-linked products. “This decline in unit-linked products is due to the unfavourable stock market environment of the first quarter.”
Total technical reserves in life insurance amounted to €172.49 billion at the end of March 2018, up 5.50% compared to the end of March 2017, but down 0.41% compared to end of December 2017.
Non-life insurance recorded a remarkable increase of 45.71% over the first three months of 2018, “mainly due to the first fallout from the approval of companies that chose Luxembourg as their base following the decision of the United Kingdom to leave the European Union.”
Luxembourg non-life companies, whose client base is outside the grand duchy, other than marine insurance, saw an increase of 72.79%, which should continue, if not increase, over the next two years. Those insurers working mainly on the national market, recorded a growth of 10.99%.