Results of Icelandic insurance undertakings in 2010
The Financial Supervisory Authority of Iceland (FME) has published tables containing the annual accounts of insurance companies with a licence in Iceland and the result of insurance classes in 2010.Non-life insurance market
The combined profit of private non-life undertakings in 2010 was 2.1 bn. ISK. The insurance activity showed a profit of 2.6 bn. ISK but in financial activity there was a loss of 600 million ISK. The main reason for this financial loss was cost from revaluation of investments, which amounted to almost 2 bn. ISK.
The non-life insurance market changed vastly in 2009 which makes comparison between years difficult. Sjóvá Almennar tryggingar hf. (Sjóvá) ceased insurance operations and its portfolio was transferred to a new company, Sjóvá-Almennar tryggingar hf. Last year the FME only published the results for the new company from 1 October, which makes comparison between the total of profit and loss accounts and the cash flow statements impossible.
The total assets of non-life undertakings were 124 bn. ISK at the end of 2010, compared to almost 118 bn. ISK the year before, an increase of 5.7%
There was also an increase in equity capital, of 8.5%. The total equity capital of private undertakings was 35 bn. ISK. The equity situation is different between undertakings and European Risk Insurance Company hf. is operating according to a plan to comply with the requirements for the minimum guarantee fund of 3.2 million EUR. Íslensk endurtrygging hf. and Trygging hf. are running of old reinsurance portfolios and are exempted from the minimum guarantee fund requirements according to Article 62 of the Reinsurance Directive.
No non-life insurance undertakings paid dividends last year.
Life insurance market
Like in 2009, all life insurance undertakings showed profit in 2010. The total profit was 1,4 bn. ISK, compared to 1.7 bn. ISK in 2009, a decrease of 14.3%.
At year end 2009 the combined assets of life insurance companies amounted to 14.3 bn. ISK, a 6.1% increase from 2009. Equity capital amounted to 6.0 bn. ISK, a 12.8% increase from 2009. One undertaking, Vörður líftryggingar hf., is operating according to a plan to comply with the requirements for the minimum guarantee fund.
The three largest undertakings paid dividends last year, a total of 1.2 bn. ISK. In 2009, two undertakings paid dividends of 800 million ISK.
Individual lines of business
When looking at performance of the individual lines of business The FME uses information regarding non-life operations from the former Sjóvá Almennar tryggingar hf. in 2009, which is now called SJ Eignarhaldsfélag hf. This method gives realistic comparability between years.
Total non-life premiums written amounted to 43 bn. ISK, a 3.0% increase from 2009. Claims cost decreased substantially, claims paid amounted to 30 bn. ISK, compared to 35 bn. ISK in 2009. However, the increase in claims provisions was 2.5 bn. ISK, compared to 400 million in 2009. Net operating expenses in non-life increased by 11.2% and were 8.5 bn. ISK last year. A significant decrease was noted in investment profits from the technical provisions which amounted to 3.2 bn. ISK in 2010, compared to 5.2 bn. ISK in 2009.
The total profit of motor insurance, compulsory and other, was 1.2 bn. ISK which is a 30.2% reduction from the year before. No significant changes were noted in premiums and claims, the main reason for less profit was less investment income, 1.7 bn. ISK compared to 2.9 bn. ISK in 2009. Due to less claims cost there was an increase in profit in other motor insurance, 909 million ISK compared to 232 million ISK in 2009.
Losses were turned to profits in marine and aviation, but in credit and suretyship there was a loss after a profit in 2009. General liability insurance has in recent year been a heavy burden on the insurance undertakings, but the loss in 2010 was 153 million ISK compared to 279 million in 2009. For the second year in a row there was a profit in accident and sickness insurance, and increased by 52%. Increased profits were also noted in property (31%) and cargo (117%).
Only one undertaking, Vátryggingafélag Íslands hf., wrote new reinsurance business last year. A few other undertakings are running off older portfolios. The total loss in reinsurance business was 100 million ISK, similar to the year before.
Premiums written in life insurance amounted to 3.4 bn. ISK, a 3.4% increase from last year. Life assurance claims incurred amounted to 1 bn. ISK, a 14.4% reduction from last year.
For further information, please contact Sigurður G. Valgeirsson, sgv@fme.is, tel: +354 520-3700 and mobile: +354 840 3861.