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Tuesday 20.03.2018 | Name days: Made, Irbe

Losses of Compulsory Motor Vehicle Liability Insurance industry are on a rise

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAccording to information from Latvian Motor Insurers’ Bureau, the number of road traffic accidents for which insurance companies received insurance claim applications was 34,330 in 2015. This means a 10.2% increase in comparison with 2014.

In total, insurance companies received 43,672 applications, which is 12.4% more than the number of applications received in 2014.

Over the course of 12 months of 2015, insurance companies had made a total of 42,044 decisions about compensations, the total sum of which had reached EUR 41.3 million. This means a 14.5% increase in comparison with the same period of 2014. «Growth of bonuses was insufficient to cover the increase of insurance expenses. This is why CMVLI industry concluded the year with losses worth nearly EUR 11.7 million,» – as reported by Chairman of LTAB Juris Stengrevics.

Out of 34,330 insurance cases registered by insurance companies throughout 2015, 31,758 of them took place in Latvia, including 18,512 in Riga.

A total of 42,044 decisions were made by insurance companies in relation to covering insurance claims. The total worth of those claims was EUR 41.3 million, which is EUR 5.2 million more than 2014. The average size of compensations for insurance claims in Latvia was EUR 936, which is a 4.3% increase in comparison with 2014. The average compensation amount for accidents that took place abroad was EUR 3,842 (+30.2% in comparison with 2014). «This rapid increase was affected by two large compensation payments of 2015. One of them was paid for a traffic accident that took place in Ireland in 2007 and the other – in Denmark in 2012,» – explains Stengrevics, adding that the average size of compensations paid abroad is 4.1 times larger than compensations for accidents that take place in Latvia.

The size of bonuses earned in the 12 months of 2015 was EUR 47 million, which means a 1.2% increase in comparison with 2014. At the same time, CMVLI market concluded 2015 with losses worth nearly EUR 11.7 million. «Significantly increased size of compensations and insufficient growth of bonuses created a situation in which CMVLI sector experienced the biggest losses since 2007. Even without losses tied to BALVA, the industry’s losses were 2.7 times larger than those of 2014. This is largely related to the increase in compensations paid for damages (including non-material damage) and the increase in the number of reserved insurance claim rewards. I suspect efforts of insurance companies to reduce losses and the expected restoration of compulsory insurance fees in the Guarantee Fund in 2016 will force the industry to add corrections to calculations of bonuses, which may lead to an increase of prices for aggressive and irresponsible drivers,» – says the Chairman of LTAB.


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