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24 May 2016, Ivor Colson, EMIS Editor

BMI: The future's bright for Slovakia's life insurance sub-sector

BMI has downgraded its growth forecast for gross life insurance premiums from an annual average of 6% to 5% in 2016-2020, due to slower growth in household income.

However, BMI’s view is that life premiums are due to grow as a consequence of rising household incomes, and increasing interest rates in savings and retirement products. These should support growth in Slovakia’s well developed life insurance market.

The main growth drivers for Slovakia’s life insurance sector over the longer term will be the increased spending of its citizens and therefore a move towards savings and investments.

As Slovakia has one of the highest rates of average savings in the region, BMI is of the opinion that the potential for growth is strong. Furthermore, Slovakia has a strengthening labour market and a decreasing unemployment rate, all positive signs for the country’s life insurance market.

Whilst these are all very encouraging signs for Slovakia’s life insurance sector, ultimately the growth of the industry will depend on the ability of firms to improve distribution and secure a larger share of the market.

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