New PIU president: Compulsory liability insurance is loss-making. Policy prices must rise

The Polish insurance market remains robust overall, with premium income growing nearly twice as fast as the national GDP. Last year, the market recorded a record 90 billion Polish złoty in premiums, a 6% year-on-year increase. This growth trend has been consistent over recent years, indicating a generally healthy sector.

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If you look at the last 15 years, the OC segment has achieved a positive technical result in maybe five or six years. The remaining years are a period when it recorded a technical loss.

However, a significant challenge persists within the motor insurance segment. For years, this sector, which constitutes nearly half of the property insurance market, has been plagued by a price war. While previously the situation was somewhat mitigated by profitable comprehensive (AC) policies, both compulsory third-party liability (OC) and AC policies are now showing very weak profitability. If current trends continue, the entire motor insurance segment is expected to end the year with a loss.

This unprofitability stems from insurers' reluctance to increase premiums for an extended period. The Polish Insurance Association (PIU) president, Grzegorz W. Chmielak, highlighted that the OC segment has only achieved a positive technical result in five or six of the last fifteen years. He stressed that significant changes are necessary, implying that a substantial increase in policy prices is inevitable to restore profitability.

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In the last period, we have seen a situation where both OC and AC are showing very weak profitability. Although in the first quarter of this year, AC profitability is minimally positive, if serious changes do not occur here, the entire motor insurance segment will end this year with a loss.

Chmielak also outlined his priorities for the PIU, emphasizing the need for the association to become a stronger, more visible voice for the insurance market. He plans to improve communication and strengthen relationships in Brussels, where key legislative decisions affecting insurers are made. The PIU aims to ensure the Polish market's voice is more effectively heard on the European stage.

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It stems from a very simple reason: insurance companies have not been raising premiums for some time.