CU Lithuania Life Insurance has reported a very successful first year of business.
CU Lithuania Life Insurance has reported a very successful first year of business.
According to the State Insurance Supervisory Service, from its launch in November 2001 to December 2002, the total number of completed contracts was almost 7,500 and the premium income was 4.8m litas (Ł910,000).
“These results are better than all the other life insurance companies that have started operating in Lithuania in their first year of operations,” said Stephen Marini, General Manager.
“They were determined by a clear strategy aimed at long- term saving services - life insurance and pension savings, and a well-defined business model that included flexible, straightforward services, as well as the support of Aviva plc, the company’s parent group.
“By now, shareholder investments in CU Lietuva have reached 36m litas (Ł6.9m), more than any other Lithuanian life insurance company has received,” he said.
The investment was used to enhance the company's profile, expand the sales network and sales consultant training. The company also implemented a modern information system, developed in the UK, which complies with Aviva group accounting and contract management standards and covers the administration of all life insurance procedures. All of which, he said, provided a firm foundation on which to expand the company.
The company currently offers five products (all unit linked): universal life, investment plan, pension plan, education fees plan and a single premium bond. It has seven sales offices: two in the capital Vilnius and one each in Kaunas, Klaipeda, Panevezys, Alytus and Kaisiadorys. The company had over 400 consultants by the end of the year.
CU Lithuania plans two new services, an accident insurance product and a health insurance product. It also plans to open offices in Siauliai, Marijampole and Utena and to increase the number of sales consultants to 550 by the end of 2003.
According to Stephen Marini, the expansion of Commercial Union Lithuania will be accelerated by the rapid growth of the Lithuanian life insurance market. This market grew by 22% in 2001 and in 2002, grew by over 60%.
He expects the market to grow by 30% annually over the next five years and that by 2006 it will be worth 360m litas, more than 2.5 times its size today.
“At the moment, life assurance premiums in Lithuania amount to just 0.26% of GDP, while in Poland, Hungary and the Czech Republic they make up about 1.5%. In Western Europe, it is almost 6% of GDP. This means that the demand for life insurance in Lithuania will be growing rapidly. It will also be encouraged by favourable taxation and firm prospects for Lithuania's GDP growth, at a rate of 4 to 5% annually,” said Stephen.
He also noted that the planned pension reform would open new prospects for CU Lithuania. “The reform will encourage growth in this market and will prompt people to plan for their old-age. CU Lithuania intends to actively participate in the reform and offer its services, and in Lithuania we can apply Aviva’s experience of other central and eastern European countries - Poland, Czech Republic and Hungary.”