(MENAFN Press) The Finnish insurance industry is well developed and has one of the highest penetration rates among the European Union (EU) countries.
The industry is fairly protected resulting in high concentration in the hands of domestic players.
Since 2007, all types of commission payments are banned in the financial services industry by the Finnish Financial Supervisory Authority (Fin-FSA).
A typical feature of Finnish insurance is that statutory insurance products such as employee pension, workers' compensation and motor liability insurance generate a major share of gross written premiums.
Uncertainty in the European region has affected the investment returns of the companies.
A growing trend of consolidation has been witnessed in the industry in order to expand the product portfolio and create synergies in business.
Over the forecast period, economic recovery and improvement in market conditions will have a positive effect on premium income.
Statutory pension forms a major portion of the life insurance segment
Statutory pension coverage is the highest contributor to the life insurance segment.
The premium income of statutory pension insurance is directly dependent on total payrolls, which have witnessed growth during 2011.
However, due to the fast ageing population and growing burden on the government finances, a change to the pension system by introducing private insurance companies is being contemplated, which would further increase competition.
In this regard, the market for voluntary corporate pension schemes is expected to increase over the forecast period and complement statutory pension schemes in Finland.
The expansion of the voluntary pension category will support growth in the life insurance segment in Finland.
Non-life segment maintained stable growth
The Finnish non-life segment remained largely unaffected by the economic crisis compared to the life insurance segment, due to the relatively low risk level of non-life investments.
A stable increase in gross written premium in statutory motor liability insurance and workman compensation also supported the growth. Insurance against fire and other damages to property continued as the largest group of non-life segment.
There is a common practice in Finland to purchase combined non-life insurance products, which is also one of the factors resulting in stable growth of the segment.
Low penetration of personal accident and health insurance segment
The penetration of the personal accident and health insurance segment is low in Finland compared to the EU average.
This is mainly on account of the well-developed Finnish welfare system having an extensive social coverage.
A significant part of physical injuries or death compensation is covered by the state rather than by private or liability insurers.
Also, effective health prevention measure have been developed to a high degree which has resulted in low rates for health insurance premiums.
However, the increased burden on government finances and growing fast ageing population will drive the market for private sector health insurers over the forecast period.
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