Jakub Strnad, CEO and founder of Pillow, assesses the development of the Czech insurance market for the professional server opojisteni.cz. (Original article here: https://www.opojisteni.cz)
How would you assess the development of the insurance market in 2023?
The most important news of the past year is the fact that the insurance market has proven its resilience in a highly inflationary environment. It has to be said that this resilience has been mainly driven by existing clients who clearly understand the importance of insurance and have not moved to cancelling their policies even in times of high inflation.
On the contrary, the insurance sector itself has reacted to high inflation as in the past, which means with a delay and not sufficiently. I would attribute the delay not only to the highly competitive environment but also to the still less than excellent data handling. In other words, the insurance industry should learn to detect pricing shocks more quickly and project their impact.
I therefore expect further market growth over at least the next 2 years, with the market back in line with adequate premium levels to the leaps in average claims over the past 2 years. The upward pressure on prices will be all the greater as the CNB base rate and hence the “risk-free” return on insurance company assets falls.
What do you think will be the most important challenges in 2024?
The most important challenge of 2024 will be the adaptation of the new law on motor third-party liability. Quite a lot has already been done in the area of digitalisation of insurance companies, but a huge scope for streamlining and acceleration is still ahead. At the same time, I see another consequence of high inflation as a major challenge, which is educating the general public about the need to increase the sums insured both for claims-made insurance to avoid underinsurance, but also for personal lines insurance so that the sums insured reflect the new price level.