Research and Markets: Latvia Insurance Report 2009 - Already, In 2008, Seesam Has Been Acquired By the Austrian, Vienna Insurance Group

The Latvia Insurance Report provides independent forecasts and competitive intelligence on Latvia's insurance industry.

The most striking change since the last report has been the rapid development of the now worldwide credit crisis and the subsequent recession following on from it. The Latvian general economy is already experiencing markedly negative year on year rates of growth. So, the very considerable macro-economic imbalances that developed in the preceding boom which were greater in Latvia than the other Baltic states, mean that Latvia looks destined for a very hard landing with as much as two years of negative growth. More generally it remains an emerging market and Europe in general faces a protracted period of negative and then low growth. Nonetheless, the following features which make Estonia attractive for its stability will also tend to insulate it from the more severe effects of this crisis.

Over the longer term, the prospects for the Latvian insurance sector are dictated by a variety of factors - some good and some bad. On one hand, there is much to be positive about. The overall country risk compares quite favourably with that of other countries in Central and Eastern Europe and, indeed elsewhere. Demand for insurance - in both the non-life and the life segments - is booming and should grow at double-digit rates throughout the forecast period. Quite unlike, say, Poland or Lithuania, insurance is not dominated by a former state-owned monopoly. Indeed, a surprisingly large number of multi-national insurers (most - but not all - of whom are associated with financial services groups that have ambitions in Scandinavia and the Baltic States) have established or bought operations in Latvia or have, at least, set up a branch office in Riga.

However, not all the insurers are subsidiaries of pan-European (or at least Scandinavian) giants. The nonlife (especially) but also the life segment includes local groups who do not have large foreign backers.

This is important, because Latvia is headed for challenging economic times. Economic and monetary convergence with Euroland, to which the government of Latvia (as a full if new member state of the European Union) is committed, will require tough decisions. Until very recently these concerned how to deal with mounting inflationary pressures. Now Latvia seems destined to experience very severe deflationary pressures.

Either way, it is reasonable to suggest that the competitive landscape will - over the forecast period - change in two ways. First, it is likely that at least one of the foreign groups who is active in Latvia will decide that the market is too small to warrant further commitment (especially if the macro-economic environment is difficult) and will pull out. Second, it is even more likely that another of the foreign groups will be able to take advantage of the woes of one of the various local groups to buy market share.

Indeed, already, in 2008, Seesam has been acquired by the Austrian, Vienna Insurance Group, marking its entry into all three Baltic state insurance markets.

Key Topics Covered:

The Sector At A Glance Key Features Of This Report Latest News Projections And Forecasts Country Update Insurance Business Environment Rating Regional Context Analysis Of Competitive Conditions Company Profiles Country Snapshot: Latvia Demographic Data Methodology Basis Of Projections

Companies Mentioned:

AEGON AIG Allianz Aviva AXA Cardif Ergo Eureko Fortis Generali Grawe Groupama HDI-Gerling HSBC Insurance ING MetLife Prudential Financial QBE RSA UNIQA Vienna Insurance Group Zurich

For more information visit http://www.researchandmarkets.com/research/f04d56/latvia_insurance_r.

SOURCE: Research and Markets

Research and Markets 
Laura Wood 
Senior Manager 
press@researchandmarkets.com 
Fax from USA: 646-607-1907 
Fax from rest of the world: +353-1-481-1716