In the first quarter of 2018, the inflow of the insurance sector again recorded a significant uptrend after an already very successful fiscal year 2017: for all lines of insurance combined, premiums increase by 10.11% compared to the same period of the previous fiscal year.
The increase in activity affects all sectors: the inflow of life insurance business increased by 4.35% compared to the first quarter of 2017, premiums in non-life insurance increased by 45.71% compared to the corresponding quarter of the previous year.
In life insurance, the quarterly increase of 4.35% in premiums collection masks divergent and large-scale developments according to the types of products: for products with guaranteed returns, premiums are up 37.16% compared to the corresponding quarter of the previous year. Contrary to similar increases in the past, those of the first quarter of 2018 is due primarily to the development of a large business of pure protection products and not to savings operations. Growth in guaranteed return products was partially offset by a 7.79% decline over the same premium period for unit-linked products. In terms of net inflows, i.e. inflows minus redemptions, the situation is very different: for both branches the net inflow was positive during the first quarter of 2018 and it increases the order from €700 to €800 million for each of these branches between 2017 and 2018.
Life insurers' total technical reserves amounted to €172.49 billion at the end of March 2018, up 5.50% compared to the end of March 2017, but down 0.41% compared with the same period last year. This decline, which affects only the unit-linked products, is due to the unfavourable stock market environment of the first quarter, while the overall net inflow is positive and the annual redemption rate of 6,79% compared to the technical provisions is down significantly compared to that of 8.45% of the fourth quarter of 2017.
Non life insurance recorded a remarkable increase of 45.71% over the first three months of 2018, mainly due to the first fallout from the approval of companies that chose Luxembourg as a place of installation following the decision of the United Kingdom to leave the European Union. Companies operating outside Luxembourg in non-life insurance lines, other than marine insurance, are thus seeing an increase of 72.79%, which should continue, if not increase, over the next two years. Luxembourg insurers working mainly, if not exclusively, on the national market, recorded a growth of 10.99% in their premium collections. The figures of the marine insurance, which is essentially the fact of some large mutuals whose cashing reflects the evolution of the claims, will be available only later.