News release 30 December 2013 – 18/2013

Report on the profitability of motor liability insurance 2003–2012 shows high levels of profitability and income

The premium pricing policy in motor liability insurance reflected prudence in 2003–2012. Premiums written in 2012 totalled EUR 790 million, an increase of around 4% on the previous year. The balanced underwriting result relative to premiums written amounted to 13% in 2012, compared to an average of 9% in 2003–2012.

For the reference period, motor liability insurance recorded the best result in 2012, amounting to 36% of premiums written. There were, however, notable differences between individual companies.  The average result relative to premiums written was 10% over the whole reference period, which shows that the underwriting business of insurance companies has been profitable on average. The average rate of return on the capital employed in insurance business was 19% for the reference period.

The combined ratios for motor liability insurance show differences by client groups:  motor insurance premiums for licensed traffic have been lower than average in relation to costs, whereas premiums for insurance taken out by private individuals have been higher than average.

Motor liability insurance is a statutory insurance which must be taken out for all motor vehicles in use. Legislation also defines the losses to be compensated from motor liability insurance and the damages payable for losses incurred. For the above reasons, it is important that motor liability insurance premiums are calculated so as to secure insured benefits but in reasonable proportion to the costs incurred. In its report, FIN-FSA assesses the prudency and equity of motor liability insurance premiums.

The report is based on data for 2003–2012, including calculations, formulas and tables relating to premiums and financial performance. Financial performance data are presented both in aggregate form and by insurance company.

For further information, please contact

  • Pirkko Welin-Siikaluoma, Chief Actuary, tel. +358 10 831 5533
  • Tuuli Wiio, Actuary, tel. +358 10 831 5534