Slower Expansion of the Insurance Industry

In 1989 and 1990, the expansion of the private insurance sector fell short of overall economic growth. For the first time in the eighties premium revenues rose less fast than nominal GDP. The tax reform of 1989 and the high level of interest rates let life insurance premium yields even decline in 1990. The loss ratio in the health insurance business hit its lowest level in six years in 1989, but rebounded thereafter. The motor vehicle liability insurance recorded higher premium revenues, concentrated however on the top brackets. Premium level differentials are currently too low as to induce substantial shifts in market shares from high- to low-premium insurers. For the first time, securities in 1989 claimed the largest share in the investment portfolio of insurance companies.