The 3rd quarter of 2018 saw a clear rebound in the evolution of inflows in the direct insurance sector with an increase in premiums of 17.84%.
This positive change came after the rather disappointing evolution of the previous quarter: considering all lines of insurance combined, premiums increased by 17.84% per annum compared to the same period of the 2017 financial year.
In the first nine months of the 2018 financial year, the global inflow progressed with a slight increase of 2.00%. Notable differences were recorded between the different branches: premiums remained down 1.24% in life insurance but went up 23.16% in non-life insurance.
In life insurance, the decrease of 1.24% in premium income over the first three quarters of 2018 masks divergent trends according to the type of product, trends that confirm those observed during the first half of the year. The growth in inflows was attributable exclusively to guaranteed return products whose premiums increased by 51.27% while the inflow relative to unit-linked products fell by 17.85%. The growth in the inflow of guaranteed return activities was not only due to the development of a significant protection products business, already reported for the first quarter of 2018, but mainly to savings operations.
Life insurers' total technical reserves amounted to €180.64 billion at the end of September 2018, up 7.16% compared to the end of September 2017 and 2.31% compared to the end of June 2018. The increase of €4.03 billion in the third quarter of 2017 is mainly attributable to a positive net inflow, the new premiums being higher by €3.45 billion in the amount of redemptions, whereas the revaluation of the contracts reached €0.58 billion. The redemption rate has returned to a historically low level of 5.91% of technical provisions.
Meanwhile, non-life insurance rose by 23.16% over the first nine months of 2018, this growth continues to be significantly impacted by the fallout from the approval of companies having chosen Luxembourg as a place of installation following the decision of the United Kingdom to leave the European Union. Insurers working mainly, if not exclusively, on the Luxembourg market recorded a growth of 8.92%. With a 36.89% increase in their premiums, companies operating abroad in non-life insurance lines, excluding marine insurance, are progressing much more significantly. Marine insurance, for which only Q2 figures are available and which is mainly due to a few large mutuals whose cashing reflects the evolution of claims, declined by 15.61% during this period.
