Most Icelandic insurance companies show profit in 2009

3.6.2010

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 2009.

Non-life insurance market

The combined profit of non-life companies operating in the end of 2009 was 2.5 bn. ISK, which can mainly be attributed to a 3 bn. profit by Viðlagatrygging, a specialised state owned catastrophe insurance company. The results of Viðlagatrygging are not used in the following discussion. Other non-life insurance operations had a loss of 669 million ISK, mainly due to a 2.5 bn. ISK loss in financial activity. That loss can be explained by amortization of 6.7 bn. of intangible assets.

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. The former company is now called SJ Eignarhaldsfélag hf. Annual account tables do not include numbers from the old company.

Equity capital increased substantially between years, from 5.5 bn. ISK to 33 bn. ISK. The increase can be explained by the status of Sjóvá by the end of 2008 and 2009. In the end of 2008 Sjóvár Almennra tryggingar hf. had negative equity capital of 16 bn. ISK. During 2009 Sjóvár‘s portfolio was moved to a new company which bears the same name. Equity investment from the owner of the new company was 15 bn. ISK.

The Financial Supervisory Authority publishes, for the first time, information from cash flow statements. Cash in hand, excluding Viðlagatrygging, decreased by 1.5bn ISK in 2009. Out of non-life insurance companies only Íslensk Endurtrygging hf. paid dividends, amounted to 11 million ISK.

Life insurance market

Life insurance companies operated with a profit of 1.7 bn. ISK in 2009, a 13.7% increase from 2008. The technical result of the life insurance operations was a profit of 1.5 bn. ISK, a 15.2% increase from 2008. Profit from financial activity amounted to 300 million ISK, a 5.8% decrease from 2008.

At year end 2009 the combined assets of life insurance companies amounted to 13.5 bn. ISK, a 10.1% increase from 2008. Equity amounted to 5.3 bn. ISK, a 20.9% increase from 2008.

Two life insurance companies paid dividends in 2009. Líftryggingafélag Íslands hf. paid 500 million ISK and Okkar líftryggingar hf. paid 300 million ISK. Cash and cash equivalents decreased by 3 bn. ISK

Individual branches

When looking at individual branch performance The Financial Supervisory Authority uses information regarding non-life operations from the former Sjóvá, which is now called SJ Eignarhaldsfélag hf. This method gives realistic branch comparability between years.

Premiums written amounted to 42 bn. ISK, a 7.7% increase from 2008. Half of that, around 20 bn. ISK, is due to motor insurance. Claims incurred from non-life insurance amounted to 35 bn. ISK, an 11.6% decline from 2008. Profits from non-life operations amounted to 3.8 bn. ISK, 1.9 bn. ISK excluding Viðlagatrygging.

Motor insurance profits amounted to 1.7 bn. ISK, a 27.2 % increase from 2008. Profits from compulsory motor insurance amounted to 1.4 bn. ISK, a 40% decrease from 2008. Other motor insurances showed profit, 232 million ISK, the first time in many years.

Losses were turned to profit in property, accident and sickness insurance, but marine and aviation showed losses. General liability insurance has been a heavy burden on the insurance companies, losses amounted to 280 million ISK, similar to previous years.

Premiums written in life insurance amounted to 3.3 bn. ISK, a 7.2% increase from last year. Life assurance claims incurred amounted to 1.3 bn. ISK, a 42.3% increase from last year.

For further information, please contact Sigurður Valgeirsson, sgv@fme.is, tel: +354 525-2700 and mobile: +354 840 3861.


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