Total investment portfolio managed by insurers in Europe grows 4.2% to €10,433bn

Written by Adam Cadle

18/03/2021

The total investment portfolio managed by insurers in Europe grew 4.2% to €10,433bn in 2019, after a 1.6% decline in 2018.

According to Insurance Europe’s latest European Insurance in Figures report, the growth was driven by the 4.5% (1) increase in continental Europe’s premiums in 2019, as well as the positive performance of financial markets, which recovered after a turbulent fourth quarter of 2018 caused by international trade tensions and concerns about increases in interest rates by the US Federal Reserve.

Double-digit growth in portfolios was reported by Insurance Europe’s member associations in Hungary (18.8%), Bulgaria (17.9%), Sweden (16.8%), Turkey (14.5%), Greece (14%), Latvia (13.5%), Iceland (13.3%), the Netherlands (13.1%) and Norway (10.9%).

Strong performance was also registered in Finland (9.8%) and France (8.5%), as well as Portugal (8%), Slovakia (7.9%) and Croatia (7.5%). Only a handful of markets witnessed shrinkage in their portfolios, notably Liechtenstein (-8.5%), the UK (-8.1), the Czech Republic (-8.4%) and Denmark (-6.8%).

Total premiums in Insurance Europe’s member countries amounted to €1,254bn in 2019, a decline of 3.3% on the year before.

Overall growth excluding the UK was up 4.5%, slightly higher than the average growth of 3.9% over the seven years to 2019.

Across all member countries, there was steady growth of 2.2% in P&C insurance to €409bn, and stronger growth in health insurance at 6.8%. Life premiums in Europe decreased 7.5% in 2019 to €700bn, after a 7% increase in 2018. This decrease is related to the 34.8% decline in premiums in the UK.

Life premiums excluding the UK grew 4.7% to €547bn. Of all life premiums, 76.3% were written in Europe’s five largest markets: the UK, France, Italy, Germany and Spain. These markets’ combined share of Europe’s total life premiums in 2019 decreased 2.7pp, largely due to the negative dynamics in the UK.

(1) Special note on the UK figures - The Association of British Insurers (ABI) reported significant decreases in life premiums and benefits paid in 2019, of -34.8% and -41.8% respectively. This led to sizeable decreases in the UK’s total premiums and total claims and benefits paid. These drastic decreases are primarily due to the fact that the results of several UK life insurance companies are no longer included in the ABI figures. Other reasons include changes in the business structure of some of the reporting companies (including business transfers and restructurings), as well as a decrease in pension benefits paid. Likewise, the 8.1% decrease in insurers’ investments in the UK in 2019 is mainly due to a decrease in companies reporting to the ABI, as opposed to a change in the total value of UK insurance investments. In this report, the total premiums and total claims and benefits paid and the life premiums and benefits paid include the UK, but the growth rates are shown both including and excluding the UK. The growth rates excluding the UK are marked with an asterisk. For the European investment portfolio, however, both the total volumes and the growth rates include the UK figures. As the above-mentioned changes relate to life insurance only, all the volumes and growth rates for European health and P&C insurance include the UK figures.

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