Belgium Insurance Market Grows across most lines
Belgium is a relatively small country geographically with a small population but it had the 18th largest non-life insurance market in 2019, the 28th largest PA and healthcare market and the 21st largest insurance market overall. This reflects the high non-life insurance penetration at 2.03% of GDP. The market is competitive, with a significant number of players and the requisite support system of brokers, reinsurers, lawyers, accountants and other service providers.
Its generally stable political system and economy and closeness to EU decision-making have made it a base in which many international companies have sought to establish their headquarters. Insurers have set up new regulated EU subsidiaries in Brussels (Lloyd's, MS Amlin and QBE) to allow them to continue to operate across the EU post-Brexit.
The non-life market generated EUR 9.60bn (USD 10.74bn) of premium in 2019, which was a 5.25% growth on the previous year (excluding personal accident and health). Growth was seen across most lines although there was a notable decrease in aviation insurance and a significant rise in marine, construction and engineering, professional indemnity and various financial loss insurance although generally from a relatively low base. The largest line of business was motor, which accounted for 31.0% of premium. Property and PA and healthcare were the next largest lines and generated 23.1% and 20.5% respectively.
Belgian non-life business was profitable in 2019, despite some storms. The market remains highly competitive in most personal lines and for smaller businesses with rates stable but is said to have hardened sharply for large corporates and medium-sized businesses. This has been influenced by reduced reinsurance capacity in the face of continued low investment returns and poor underwriting results. Insureds are being offered lower limits in return for increased deductibles and higher premiums. Some are considering more self insurance and utilisation of captives. The hardening market is also putting pressure on brokers to prove the value they add (many have only experienced soft markets).
Insurers expect gross premiums overall to reduce in 2020 due to COVID-19 although the impact will differ depending on the branch of business. Travel insurance premiums are expected to reduce as well as motor premiums (including fleet business) due to people not travelling during lockdowns. Workers' compensation premiums are adjusted according to definitive salary figures at the end of each year. With many people unemployed, if only temporarily, there will be a lower base on which to calculate insurance premiums. Other classes of insurance business that calculate premiums on business turnover will also suffer from the economic impact of the pandemic.
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