The insurance sector in Latvia faced new challenges following the overcoming of the Covid-19 pandemic in 2022, especially the war launched by Russia in Ukraine and the negative effects of it in the macroeconomic context. Fast-growing inflation exerted pressure on insurance payments and premiums, while the rapid increase in interest rates prompted insurers to reconsider the structure of their investment portfolios.
In 2022, EUR 535.8 million was signed in non-life insurance premiums in Latvia, compared to the previous year, with premiums increasing by 22.5%. EUR 319.6 million has been paid in insurance claims, which is 17% more than in 2021. The return of the intensity of economic activity before the Covid-19 pandemic resulted in an increase in insurance demand and, at the same time, an increase in the incidence of insurance cases.
Similarly, the high inflation observed in 2022 led both to an increase in the tariffs applicable in the setting of premiums and to an increase in the amount of remuneration paid. As a result, aid (travel) insurance premiums increased by 54.9%, OCTA insurance by 33.2% and Kasko by 24.5%. The most significant increase in insurance claims was by 129.3% in aid (travel) insurance, 23% in accident insurance, and 21.4% in land transport insurance (Kasko).
In 2022, EUR 143.3 million has been signed in life insurance premiums in Latvia, with premiums decreasing by 4.1% compared to 2021. On the other hand, EUR 112.8 million has been paid in insurance reimbursements, which is 39.6% more than in the previous year and is explained by the uncertainty caused by the geopolitical situation in the region and its negative effects in the macroeconomic context.
Insurance companies registered in Latvia ended the year 2022 with a profit of €28.8 million: non-life insurance companies earned €21.8 million, which is 8.2% more than the previous year, while life insurance companies earned €7.0 million, profits decreasing by 56.4% compared with the previous year.
At the end of 2022, six insurance companies were registered in Latvia and insurance services were provided by branches of insurers of 11 EU Member States.