While most people identify Russia as the emerging insurance market in Eastern Europe, Lloyd’s notes that “Poland is beginning to make a name for herself. When Lloyd’s Chairman Lord Levene visited the country last year, he referred to it as ‘the largest and most sophisticated market in Eastern Europe.’ By March 2008, a Lloyd’s Representative for Poland had been appointed, with the main aim of working on the process of gaining a full establishment license for Lloyd’s in the region.”
In an interview on the Lloyd’s web site (www.lloyds.com), Witold Janusz, the director in charge of Lloyd’s expansion in Poland, described the process.
“We are very much advanced in these efforts,” he stated. “A formal application was completed at the end of April and sent to the FSA [the UK’s Financial Services Authority] last month. We have since received a confirmation from them that our application has been sent to the Polish regulator, KNF. Within the next two months we should have learned their final position.”
As soon as the license is in place, Janusz’s role will be to represent Lloyd’s interests in Poland, and in particular to look for new business opportunities in the region for Lloyd’s Managing Agents.
Those opportunities are beginning to emerge, with the Polish insurance sector very much on an upwards curve. Janusz explained: “At the beginning of 2008 we had about 43 non-life insurance companies and about 30 life insurance companies operating in Poland. Of the non-life insurance companies, 33 are so called carriers with headquarters in Poland, and ten are branches with either mother companies or headquarters situated abroad.”
Total life and non-life premiums reached 43.7 billion Polish Złoty (around £10 billion – $19.44 billion) in 2007, exceeding the prior year results by 16 percent. “In the non-life market, motor [auto] is the dominant force, accounting for 65 percent of business in 2007, while property premiums have been growing considerably since 2001,” said Lloyd’s. “But it is in the liability classes where big growth is expected. Janusz noted that since “Poland’s entry to the EU [in 2004], there has been a growing demand for this class of insurance. It has changed the environment for Polish entrepreneurs, in particular those exporting their products to the EU, resulting in increased interest in liability policies.
“The market is now looking for reliable insurance partners that can offer businessmen real protection, both in Poland and abroad, against the emerging risk of product liability and product recall.”
Aside from a developing insurance industry, Poland also has a “booming economy with an average GDP growth rate in the last few years of 6 percent and a significant drop in unemployment rate – it was 10 percent in 2007, compared with 17 percent in 2001,” said Lloyd’s.
Janusz described this combination of factors as “quite promising for the development of the insurance sector in Poland. For instance, the motor insurance market is expected to double within the next ten years with demand for comprehensive cover predicted to grow as people buy newer cars. As far as property insurance is concerned, prospects in the industrial and commercial sector also appear encouraging with the economy expecting to see further stimulus from the Euro 2012 [football] Championship.
“It is expected there will continue to be development in liability insurance as a result of growing public awareness and increasing export contents. Over the next five years, I estimate a growth rate of 15 percent for both life and non-life insurance classes.”
To underscore how important Lloyd’s considers Poland, Lord Levene is due to visit the country later this year, and will be meeting with Janusz indicated that the “visit of Lord Levene will give a further positive sign to the insurance market in Poland that Lloyd’s is determined to establish a presence and to develop more vigorously its future business here. Lloyd’s is a great brand in Poland, as one big broker here said to me, ‘this is a magic name.'”
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