as at 31 december 2020

Eesti finantsteenuste turg 06/2020THE ESTONIAN FINANCIAL SERVICES MARKET as at 31 December 2020
This review covers the services provided in Estonia by companies that come under the supervision of Finantsinspektsioon.
Sakala 4 15030 Tallinn + 372 668 0500 + 372 668 0501 [email protected] www.fi.ee
CONTENTS 1. GENERAL DEVELOPMENT OF THE FINANCIAL SERVICES MARKET 4
2. DEPOSITS 6
4. LOANS ISSUED BY CREDITORS 15
5. INVESTMENT AND PENSION FUNDS 20
6. PAYOUTS FROM THE SECOND PENSION PILLAR 24
7. MANAGEMENT OF SECURITIES PORTFOLIOS 25
8. THE LIFE INSURANCE MARKET 28
9. THE NON-LIFE INSURANCE MARKET 35
10. PAYMENT SERVICES 43
THE ESTONIAN FINANCIAL SERVICES MARKET AS AT 31 DECEMBER 2020 4
01
Changes in the volume of the main financial services in 2020
4%
12 %
11 %
1. GENERAL DEVELOPMENT OF THE FINANCIAL SERVICES MARKET
1 To avoid repeating data, investments by foreign investment funds show only investments that Estonian residents have made themselves, and not through Estonian insurers, investment and pension funds, or portfolio management services as part of a securities depositing service.
The development of the Estonian financial services sector in 2020 was affected most by the outbreak of the Covid-19 pandemic in the spring and by the planned pension reform, but they did not affect all financial services in the same way. Most financial services increased their volumes despite the coronavirus crisis, as deposits and investment increased and more was taken out than before in housing loans. Demand for some financial services declined though, as the crisis affected sales of travel insurance most within insurance for example, since the restrictions reduced travel by a large amount. Premiums written for motor vehicle liability insurance were also down. The uncertainty caused by the spread of the Covid-19 virus made consumers less active in taking new consumption loans. Life insurance was affected very much by the pension reform that came in at the start of 2021 and that allows people to withdraw money directly from their pension fund and not sign a pension contract with an insurer.
Aggregate deposits grew very fast in 2020, adding 20% or 4.1 billion euros, while growth in 2019 was 12%. The growth was driven by an increase in the stock of demand and overnight deposits over the year of 27%, or 4.4 billion euros, while the stock of term and savings deposits decreased by 13%, or 0.5 billion euros, at the same time. At the end of the year there was a total of 23.9 billion euros invested in deposits.
The aggregate stock of the loan portfolios of the banks in Estonia grew at the same rate in 2020 as in the previous year, adding 4% or 857 million euros, and at the end of the year it stood at 20.7 billion euros. Growth slowed in the aggregate stock of consumer loans from creditors though to 2% or 23 million euros, leaving the total stock at 1.19 billion euros at the end of the year.
The amounts involved in investment services mostly grew, as pension fund assets increased by 12% and investments in foreign funds1 grew by 8%, but the value of assets of public investment funds fell by 4%. The aggregate volume of individual portfolios increased by 15%. However, other direct investments in financial instruments, such as in holding securities, increased by 46% at the expense of equities.
Table 1. The volume of investment and banking services provided by financial institutions in Estonia at the end of 2020 (million euros)
Service Volume of which private Estonian residents
Pension funds 5,557 5,557
Foreign funds offered in Estonia 90 71
Unit-linked funds 301 301 Individual portfolios 685 107 Bank loans 20,668 9,650 Loans by creditors 1,185 -
Demand and overnight deposits 20,677 7,769 Term and savings deposits 3,111 1,498 Investment and other deposits 129 6 Other financial instruments 1,006 369
02
Financial assets and liabilities of private Estonian residents (million euros)
Demand and overnight deposits Term and savings deposits Pension funds Other financial instruments Loans Consumption loans Investment and other deposits
-12,000
-9,000
-6,000
-3,000
0
3,000
6,000
9,000
12,000
15,000
18,000
Average net financial assets of private Estonian residents (euros)
In total, the assets invested in financial services aimed at savings and investment, which includes investment funds and pension funds, individual portfolios, direct investment financial instruments, term and savings deposits, and investment and other deposits, grew by 6% in 2020 to 11.4 billion euros at the end of the year from 10.7 billion euros at the end of 2019. The amount held as deposits on current accounts increased by 27% over the year to 20.7 billion euros at the end of the year. A total of 32 billion euros was invested in all the different financial services in Estonia.
Insurance premiums in life insurance declined by 11% to 86 million euros. Insurance premiums also declined in non-life insurance, falling 4% to 383 million euros.
The financial assets of Estonian private residents were larger than their liabilities in 2020, as there were 15.7 billion euros of financial assets at the end of the year, and 10.8 billion euros of financial liabilities. The financial assets of Estonian residents grew faster than their financial liabilities, as aggregate financial assets increased by 14% and aggregate liabilities by 5%.
This meant the net financial assets of Estonian private residents were 4.9 billion euros at the end of the year, which was up 1.4 billion euros on the year.
The average private resident of Estonia had financial assets at the end of the year of 11,814 euros, and outstanding loans of 8150 euros. This gave the average private resident net financial assets of 3664 euros, up from 2580 at the end of 2019.
2. DEPOSITS2
STOCK OF DEPOSITS
2 The data cover credit institutions and Estonian branches of foreign credit institutions operating in Estonia, and so they cover the deposits of Estonian residents and non-residents. They do not cover deposits in the foreign branches of Estonian credit institutions. 3 Includes deposits taken through online deposit-taking platforms. 4 Includes state-owned and local government owned companies. 5 Includes non-profit organisations. 6 Includes insurers and pension funds.
The stock of deposits in banks operating in Estonia increased very fast in 2020, growing by 20% or 4.1 billion euros3 to stand at 23.9 billion euros by the end of the year, having grown by 12% or 2.2 billion euros in 2019. Deposits grew in 2020 for all the main client groups, with the deposits of businesses growing the most.
The stock of demand and overnight deposits increased by 27% over the year to 20.7 billion euros at the end of it. The stock of term deposits and savings deposits declined by 13% over the year to 3.1 billion euros at the end of it. This came mainly from private individuals and financing institutions. Other deposits, including investment deposits, stood at 129 million euros.
The stock of deposits of businesses4 increased at a record rate of 24% over the year to reach 8.9 billion euros. A large majority of 93% of corporate deposits were demand and overnight deposits, which totalled 8.3 billion euros, while the remaining 7% was in term deposits and savings deposits. The deposits of non-resident businesses increased a little over the year, but they remained unchanged as a share of corporate deposits at 2%.
The stock of deposits of private individuals5 increased at the same rate of 13% as in the previous year, and passed the 10 billion euro mark for the first time to stand at 10.5 billion euros. The largest part of these private deposits were
demand and overnight deposits, which totalled 8 billion euros or 76% of them. It is notable that the stock of private term and savings deposits, which had grown stably in recent years, declined in 2020. Their share in private deposits fell from 28% to 24%. Term deposits from private individuals that came through specialised deposit platforms from countries in Western Europe increased in the first half of the year, but they declined by the end of the year to where they had started it. At the end of the year, the term deposits of residents of Western Europe stood at 0.9 billion euros, or 37% of the term deposits of individuals. Non-resident individuals held a total of 1.3 billion euros in deposits in Estonia.
The stock of government deposits increased from 1.5 billion euros to 2.1 billion euros. Government deposits have never previously been at such a high level. The stock of deposits of financing institutions6 increased from 1.8 billion euros to 2.3 billion euros.
04
1,4 97 1, 84
0
2,000
4,000
6,000
8,000
10,000
12,000
of which non-resident businesses of which non-resident individuals
Market share by volume of deposits (three largest): Swedbank 45% SEB Pank 22% LHV Pank 17% Clients: 2,849,385 current contracts Volume of services: total deposits 23.9 billion euros
MARKET SHARE OF BANK DEPOSITS The stock of client deposits grew in 2020 in most banks, with especially fast growth at LHV Pank, which increased its market share from 14% to 17%. Growth in deposits also accelerated at the smaller banks, as Coop Pank increased its market share from 2% to 3%, and Bigbank increased its from 1% to 2%. The market share of Swedbank fell from 46% to 45% even as deposits grew, while the market share of SEB Pank fell from 23% to 22% of all deposits.
Deposits in the market for government deposits grew at all banks, with particular growth at LHV, which had a 19% share of the market, Swedbank held the largest share of the market for government deposits with 34%, and it was followed by SEB with 21%.
The fastest growth in the market for the deposits of financial institutions was at LHV, where market share grew from 31% to 53%. It was followed by SEB with 19% and Swedbank with 18%.
07
Market share of government deposits as at the end of 2020 (end of 2019 in brackets)
LHV Pank 19% (14%)
Luminor Bank 19% (22%)
SEB Pank 21% (23%)
08
Market share of deposits of financial institutions as at the end of 2020 (end of 2019 in brackets)
Other 1% (3%) Coop Pank 1% (2%)
LHV Pank 53% (31%)
SEB Pank 19% (19%)
06
Market share of deposits as at the end of 2020 (end of 2019 in brackets)
Other 2% (2%)
Coop Pank 3% (2%)
LHV Pank 17% (14%)
SEB Pank 22% (23%)
Swedbank 45% (46%)
09
Market share of corporate deposits as at the end of 2020 (end of 2019 in brackets)
TBB pank 1% (1%) Coop Pank 3% (1%)
LHV Pank 16% (13%)
SEB Pank 23% (24%)
10
Market share of private deposits as at the end of 2020 (end of 2019 in brackets)
Inbank 3% (3%)
LHV Pank 10% (10%)
Other 1% (1%)
Market share in the market for corporate deposits grew most at LHV Pank, where it increased from 13% to 16%, and at Coop Pank, where it increased from 1% to 3%. Swedbank again held the largest market share with 45% followed by SEB Pank with 23%.
The market for private deposits held stable. There were only changes in market share at two banks, as the market share of Luminor Bank fell over the year from 6% to 5% while that of Bigbank grew from 3% to 4%. Swedbank held the largest market share with 51% followed by SEB Pank with 22%.
Table 2. Number of current deposit contracts* at the end of 2020
Deposit type All deposits of which non-resident deposits
demand and overnight deposits 2,445,989 41,04 of which privately owned 2,158,610 38,998 term and savings deposits 396,637 43,420 of which privately owned 390,538 43,369 investment and other deposits 6,759 3,990 of which privately owned 5,868 3,980 * Deposits with money on account. The number covers both residents of Estonia and non-residents.
12
5, 84
3, 29
31.12.2019 30.06.2020 31.12.2020
NUMBER AND SIZE OF DEPOSITS There was a sharp jump of 153,725 in the number of client contracts for deposits at the banks operating in Estonia in 2020, after growth of 4934 in 2019. The rapid growth came from the deposits of private individuals, which increased by 139,598 over the year. The number of contracts for corporate deposits increased by 12,622 over the year.
There were 2,849,385 deposit accounts at the banks operating in Estonia at the end of the year. The number of demand and overnight deposits increased over the year by 167,756, but the number of term and savings deposits fell by 17,248. Other deposits grew for the first time in a long time, with the number of investment deposits increasing by 3217, largely due to residents of Western Europe.
The deposits of resident and non-resident private individuals are very different in size, and the deposits of non-residents are on average larger than those of Estonian residents. The difference is particularly large in term and savings deposits and in other deposits, where money is received from clients in Western Europe. The average term deposit of private individuals resident in Estonia was 4315 euros at the end of the year, while that of the average non-resident private individual was 21,236 euros. Some banks in Estonia also took in other deposits from foreign clients in 2020. This was immediately reflected by a rise in their average size, as the average other deposit of non-resident private individuals increased to 25,377 euros.
3. LOANS ISSUED BY CREDIT INSTITUTIONS7
THE LOAN PORTFOLIO
7 Loans issued in Estonia by banks. 8 Also includes non-profit institutions serving households (NPISHs). 9 Includes state-owned and local government owned companies. 10 Includes insurers and pension funds. 11 The general government covers the central government, local governments, the state social insurance fund and other off-budget funds.
The stock of loans issued by banks increased by 4.3% or 857 million euros in 2020 to stand at 20.7 billion euros by the end of the year, having grown by 3.9% or 737 million euros in the previous year.
The largest part of the loan growth came from private clients. The loan stock of private individuals8 grew by 478 million euros in 2020, while the stock of loans issued to businesses9 grew by 319 million euros and those to the general government did so by 217 million euros. The stock of loans issued to financial institutions10 declined by 157 million euros.
At the end of the year, 9.8 billion euros had been issued in private loans, and 7.6 billion euros in corporate loans. Private loans accounted for 47% of the total portfolio and corporate loans for 37%. Loans to financial institutions totalled 2.5 billion euros, and loans to the general government11 0.7 billion.
Like earlier, the growth in loans to individuals was driven by housing loans, and this was one of the few types of loan where the stock increased in 2020. Despite the uncertainty
caused in the economy by the spread of the Covid-19 virus, the stock of housing loans grew as fast as it had in the previous year, adding 537 million euros, having increased by 523 million in 2019.
The stock of loans for everyday consumption fell for the first time in a long time, as consumption loans contracted by 31 million euros, credit card loans by 18 million euros, and overdrafts by 3 million euros. The volume of study loans was also down, falling by 11 million euros.
Market share by stock of the loan portfolio (three largest): Swedbank 41% SEB Pank 28% Luminor Bank 12% Private clients: 775,158 current contracts Volume of services: stock of the aggregate loan portfolio 20.7 billion euros
51
Stock of loans to private individuals (million euros)
THE AVERAGE LOAN BURDEN OF PRIVATE CLIENTS
12 Reasons why private individuals and non-profit associations take other loans include purchases of securities, and starting or expanding businesses.
Like previously, the largest part of the loan burden of private clients was made up of housing loans in 2020. The average outstanding housing loan grew by 2084 euros over the year to 45,803 euros by the end of the year. This was followed by vehicle leases, though the average outstanding lease fell for the first time, losing 64 euros to 10,589 euros.
The average outstanding other loan12 increased from 15,233 euros to 15,642 euros. The average amount outstanding in other loans is so large because such loans are also used to finance business activities.
Consumer loans from banks, which average 2010 euros, are much larger than those from creditors, which average 784 euros. The average consumer loan taken from a bank fell in 2020 by 42 euros, while the average loan from a creditor increased by 38 euros.
The average outstanding credit card and study loans fell, but only by a little, so that the average outstanding credit card loan was 837 euros, while the average outstanding study loan was 2118 euros.
Having risen for several years, the number of loan contracts signed with private individuals fell in 2020 by 5% or 43,422 contracts. Around half of this was because the number of credit card contracts fell sharply by 10% or 21,701, while the number of consumer loan contracts, which had previously only ever risen, fell by 3% or 8945.
The number of housing loan contracts with private clients was 188,980 at the end of the year, up from 185,697 at the end of 2019. There were 306,067 consumer loan contracts, down from 315,012 at the end of 2019; 193,178 credit card contracts, down from 214,879; 41,335 overdraft agreements, down from 51,859; 25,523 study loan contracts, down from 30,781; and 20,075 other loan contracts, down from 20,352.
53
45 ,8
31.12.2019 30.06.2020 31.12.2020
54
Swedbank 41% (42%)
Market share of bank loans as at the end of 2020 (end of 2019 in brackets)
55
SEB Pank 30% (33%)
Swedbank 35% (43%)
Market share of loans to government as at the end of 2020 (end of 2019 in brackets)
56
Market share of loans to financial institutions as at the end of 2020 (end of 2019 in brackets)
LHV Pank 5% (5%) Coop Pank 6% (5%)
Inbank 1% (5%)
Swedbank 34% (33%)
MARKET SHARE OF BANK LOANS The biggest changes in the distribution of the loan market in 2020 were the growth in lending volumes at LHV that increased its market share from 9% to 11%, and the growth in market share from 2% to 3% at Coop Pank. Swedbank had the largest market share in the total loan portfolio with 41%, followed by SEB with 28% and Luminor Bank with 12%. Holm Bank, which entered the market a year earlier, had less than 1% of the loan market.
Lending to the government increased substantially in 2020 at LHV, causing LHV's market share in the government loan segment to increase from 0% to 22%. The market share of Swedbank fell over the year from 43% to 35%, and that of SEB Pank was down from 33% to 30%.
Loans to financial institutions are mainly distributed between the three large banks. Swedbank had the largest share with 34%, while SEB had 29% of such loans and Luminor Bank had 24%.
57
Market share of corporate loans as at the end of 2020 (end of 2019 in brackets)
LHV Pank 15% (12%)
Coop Pank 3% (2%)
58
SEB Pank 27% (27%) Swedbank 45% (46%)
Market share of loans to private individuals as at the end of 2020 (end of 2019 in brackets)
The stock of corporate loans increased particularly quickly at LHV Pank, and so its market share for corporate loans increased further over the year, from 12% to 15%. Coop Pank also increased its market share from 2% to 3%. The corporate loan portfolio of Luminor Bank shrank, and its market share fell from 11% to 9%. Swedbank held the largest market share with 38%.
The market share of LHV Pank in the market for loans to private individuals increased from 8% to 9% and that of Coop Pank did so from 2% to 3%. Swedbank with 45% and SEB with 27% again had the largest shares of the stock of loans to private individuals.
59
Market share of housing loans to private individuals as at the end of 2020 (end of 2019 in brackets)
Coop Pank 3% (2%)
60
Market share of consumer loans to private individuals as at the end of 2020 (end of 2019 in brackets)
Holm Bank 5% (4%)
Swedbank 42% (45%)
Bigbank 7% (7%)
The majority of loans to private clients were housing loans, which were 88% of private loans at the end of 2020. This means that the division of the housing loan market affects most what happens in the market for loans to private individuals.
The four banks that issued most of the housing loans in 2020 were Swedbank, SEB Pank, LHV Pank and Coop Pank. LHV Pank increased its market share from 8% to 9%, while Coop Pank did so from 2% to 3%. The market shares of Swedbank and SEB Pank declined slightly despite the growth in the loan stock. They remained the leaders in the market for housing loans though, as Swedbank had 45% of the market and SEB Pank had 29%.
The stock of consumer loans only grew over the year at the small banks Inbank, TF Bank AB Estonia branch, and Holm Bank, and their market share increased as a result. The stock of consumer loans fell at the other banks. Swedbank held the largest market share with 42%, followed by Inbank with 23%, and TF Bank Estonia branch with 13%.
The stock of credit card loans grew only at the small banks Holm Bank and Inbank in 2020, and the result was that they increased their market share from 8% to 10% at Holm Bank and from 0% to 1% at Inbank. The stock of credit card loans fell at the other banks. Swedbank held the largest market share with 66% followed by SEB Pank with 15%.
4. LOANS ISSUED BY CREDITORS13
13 The data cover consumer loans to private individuals. 14 As well as making consumer loans to private individuals, creditors also issue loans to businesses. Finantsinspektsioon does not supervise these. The stock of loans to businesses stood at 2.18 billion euros at the end of 2020, and it was 2.31 billion euros at the end of 2019.
In 2020 there were 45 creditors not associated with banks, 11 creditors associated with banks, and 10 credit intermediaries operating in the market.
The uncertainty caused by the spread of the Covid-19 virus made consumers less active in taking new consumption loans.
Where 801 thousand new contracts were signed with creditors in 2019, there were 682 thousand new contracts in 2020. There was a fall over the year of 18% in car lease contracts signed, and of 16% in other monetary credit, which means unsecured small loans.
New loans worth 736 million euros were granted, after 877 million euros in loans were issued in the previous year. There was less lending activity than usual, which restrained the growth in the aggregate consumer loan portfolio of creditors, so while the aggregate stock grew by 12% in previous years, the growth was only 2% in 2020, and the aggregate stock stood at 1.185 billion euros14.
The largest part of the loan stock was held by creditors associated with banks, which make up 80% of the market for creditors. The remaining 20% of the market was held by creditors not associated with banks. The largest market share
among these was held by IPF Digital Estonia OÜ with 3% of the market, and PLACET GROUP with 2.4%.
Creditors associated with banks mainly operate as leasing companies and are different from other creditors in the structure of the loan portfolios and their lending conditions. The average stock of loan contracts of creditors associated with banks is mostly also substantially larger.
The largest average outstanding loan amount at the end of the year was for loans associated with residential real estate, and was for 16,039 euros on average to creditors associated with banks, and for 18,450 euros to other creditors. The average outstanding loan amount for vehicle leases was of
Market share by stock of the loan portfolio (three largest): Swedbank Liising 27% SEB Liising 19% Luminor Liising 14% Private clients: 513,930 current contracts Volume of services: stock of the aggregate loan portfolio 1.185 billion euros
61
Number of loan contracts signed in 2020 as a proportion of those signed in 2019 (2019 = 100%)
81% 84%
Q1 2019 = 100% 2020 62
Market share of all creditors by stock of the loan portfolio as at the end of 2020 (end of 2019 in brackets)
Other* 18% (21%)
Coop Liising 3% (3%) IPF Digital Estonia 3% (3%)
* The market shares of other creditors were: PLACET GROUP OÜ 2.40%, Telia Eesti AS 1.96%, Creditstar Estonia AS 1.95%, ESTO AS 1.60%, Hüpoteeklaen AS 1.31%, BB Finance OÜ 1.11%, mogo OÜ 1.11%, Monefit Estonia OÜ 1.10%, AB Kreditex AS 0.88%, OÜ Citadele Leasing & Factoring 0.72%, Svea Finance AS 0.64%, OÜ AIRES LAENUD 0.51%, Omega Laen AS 0.38%, Tele2 Eesti Aktsiaselts 0.30%, Rävala Laenud OÜ 0.26%, Nordic Hypo AS 0.18%, BestCredit OÜ 0.18%, Medicredit OÜ 0.16%, Fresh Finance OÜ 0.15%, Ehital Krediit OÜ 0.11%, AS Finora Capital 0.11%, Credit.ee OÜ 0.10%, aktsiaselts Saare Kalur 0.08%, Mercury Credit OÜ 0.08%, Eesti Ühistuliising OÜ 0.07%, Baltasar Liising OÜ 0.07%, RE Invest OÜ 0.06%, Stokker Finance OÜ 0.05%, Berger Financial Group OÜ 0.04%, ALG Liisingu Aktsiaselts 0.04%, OP Finance AS 0.03%, aktsiaselts UUEMÕISA INVEST 0.03%, Invest in OÜ 0.03%, ON24 Aktsiaselts 0.02%, PC Finance OÜ 0.02%, Best Capital OÜ 0.02%, Autokiirpant OÜ 0.02%, AARE AUTOPOOD OÜ 0.01%, Saare Finants OÜ 0.01%, Kemotex Finance OÜ 0.01%, Kinnistulaen OÜ 0.01%, OÜ Nemm Auto 0.01%, Digiteks Osaühing 0.01%, TBB Liisingu AS 0.01%, Aktsiaselts ESTRAVEL 0.00%, Bondora AS 0.00%, and osaühing LAENUKESKUS 0.00%.
63
Average outstanding loan contract as at the end of 2020 (euros)
10 ,6
Creditors associated with banks Other creditors
10,660 euros to creditors associated with banks, and of 4136 euros to other creditors. The average outstanding value of other credit for everyday use was of 1109 euros at creditors associated with banks and 791 euros at other creditors, and the outstanding amount on instalment loan contracts was of 946 euros at creditors associated with banks and 363 euros at other creditors.
CREDITORS ASSOCIATED WITH BANKS The sector of the market for creditors associated with banks is dominated by the leasing companies of three large banks. At the end of the year Swedbank Liising had 34% of the loan stock of creditors associated with banks, SEB Liising had 24% and Luminor Liising had 18%, making 76% of the market between them.
The loan portfolio of creditors associated with banks stood at 953 million euros at the end of the year, which was up only 0.8% or 7 million euros on a year earlier. The biggest growth was of 11 million euros in the stock of vehicle leases and of 8 million euros in the stock of other monetary credit. The stock of credit associated with residential real estate was almost unchanged at the end of the year, as one creditor transferred its loan portfolio to its parent bank in 2020.
The number of loan contracts at creditors associated with banks rose by 3778 in 2020 to 222,417.
64
Market share of creditors associated with banks by stock of the loan portfolio as at the end of 2020 (end of 2019 in brackets)
Other 2% (1%)
Coop Liising 4% (4%)
78 2
3 9
11 6
31.12.2019 30.06.2020 31.12.2020
CREDITORS NOT ASSOCIATED WITH BANKS The majority of the market for creditors not associated with banks is held by fewer than half of the creditors in it as 83% of the stock of the loan portfolio at the end of the year was held by 10 of the 45 creditors. The creditors with the largest market share were IPF Digital Estonia with 15% of the loan portfolio followed by PLACET GROUP with 12%. Telia Eesti, which specialises in telecommunications and IT solutions, increased its market share from 8% to 10%, and rose to third place alongside Creditstar Estonia.
The loan portfolio of creditors not associated with banks stood at 231 million euros at the end of the year, which was up 15 million euros on a year earlier. The biggest growth was again in other monetary credit, which increased by 10 million euros to 147 million euros at the end of the year and accounted for 63% of the loan portfolio of creditors not associated with banks.
The number of loan contracts increased by 10,170 over the year to stand at 291,513 at the end of the year.
66
Market share of creditors not associated with banks by stock of the loan portfolio as at the end of 2020 (end of 2019 in brackets)
Other 20% (24%)
PLACET GROUP 12% (11%)
Telia Eesti 10% (8%)
Creditstar Estonia 10% (10%)
Outstanding loans to creditors not associated with banks (million euros)
4 0
31.12.2019 30.06.2020 31.12.2020
68
18 15
Credit intermediaries Total creditors and credit intermediaries
4.1 CREDIT INTERMEDIARIES Alongside providers of consumer credit there are credit intermediaries operating in the market. A few years ago it was mainly creditors who operated in the consumer credit market, but the total number of credit intermediaries has by now risen to ten.
The turnover of credit intermediaries totalled 15 million euros in 2020, and 18 million in 2019, which is a long way below the 736 million euros of turnover of creditors.
The credit intermediary with the largest market share was Omaraha OÜ, which had 83% and was followed by Ühisraha OÜ with 9%.
A total of 16,158 consumer credit contracts were intermediated, which was 27% fewer than a year earlier, and the largest share of these contracts was handled by Omaraha OÜ, which had 84% of them.
13
22 0
4, 75
Voluntary pension funds
Real estate funds
31.12.2019 30.06.2020 31.12.2020
VALUE OF THE ASSETS OF FUNDS16
15 Investment fund data cover all the clients of public investment funds registered in Estonia, including foreign clients. 16 Asset volumes are recorded at market value. 17 Public investment funds are euro funds, alternative funds and pension funds. The Investment Funds Act that came into force at the start of 2017 subjects fund managers that nominate themselves as small funds to limited financial supervision and reporting obligations, and so they are not covered by this report. 18 Local equity funds include funds of funds and mixed funds.
The assets of public investment funds17, including pension funds, grew by 11% or 580 million euros over the year, and passed 6 billion euros for the first time to stand at 6.03 billion euros at the end of 2020. In the previous year the volume of assets grew by 943 million euros.
The growth in the funds was again led mainly by mandatory pension funds, whose assets increased by 546 million euros, or 11%, in 2020 to 5.3 billion euros by the end of the year.
Mandatory pension funds were followed for growth by voluntary pension funds, whose assets increased by 56 million euros, or 28%, in 2020 to 262 million euros by the end of the year.
Equity funds18 saw their assets decline by 9 million euros, while those of public real estate funds declined by 14 million euros.
Mandatory pension funds are still the largest type of fund, accounting for 88% of the total assets of the public fund sector. The volumes of assets of other fund types were of the same size, with each accounting for 4% of the assets of the public funds sector.
Market share of funds by volume of assets (three largest): Swedbank Investeerimisfondid 40% LHV Varahaldus 26% SEB Varahaldus 17% Total number of shareholders: 949,942 current contracts Volume of services: total value of funds 6.03 billion euros
14
Voluntary pension funds
Real estate funds
31.12.2019 30.06.2020 31.12.2020
SHAREHOLDERS IN FUNDS
19 It should be remembered that many people make investments through multiple investment and pension funds, and so the actual number of people investing through funds is smaller than the number of contracts. 20 The number of shareholders includes non-residents.
The number of shareholder contracts19 at Estonian public funds increased by a record 112,177 in 2020 to 949,94220 at the end of the year. This rapid growth was driven by voluntary pension funds, where the number of shareholders almost tripled over the year. A major contributory factor in this was that tax benefits would be available in future to those joining the third pillar by the end of the year. The great rise in the number of shareholders did not lead to any significant growth in assets though. This was because the new members made relatively small payments into the funds.
The number of shareholders in mandatory pension funds increased by 18,108 over the year, which was almost the same as the growth of 20,184 in 2019. At the end of the year, 7% of all shareholders in mandatory pension funds had their pension through an index fund, up from 4% at the end of 2019.
The number of shareholders in public real estate funds increased by 1732 in 2020, and the number in equity funds rose by 1533.
The biggest type of fund among public funds by number of contracts was mandatory pension funds with 798,072 contracts, followed by voluntary pension funds with 140,809, equity funds with 9556, and public real estate funds with 5505.
15
Market share of fund services as at the end of 2020 (end of 2019 in brackets)
LHV Varahaldus 26% (25%)
SEB Varahaldus 17% (17%)
Northern Horizon Capital 3% (4%)
Swedbank Investeerimis- fondid 40% (40%)
Tuleva Fondid 4% (3%)
16
Market share of mandatory pension funds as at the end of 2020 (end of 2019 in brackets)
17
Market share of voluntary pension funds as at the end of 2020 (end of 2019 in brackets)
Swedbank Investeerimisfondid 45% (51%)
FUND MANAGERS21
21 The market shares of fund managers are calculated from the assets of public investment funds registered in Estonia.
The distribution of the market for funds services remained stable in 2020, and the changes were of not more than one percentage point. The market share of the fund management market grew for Tuleva Fondid from 3% to 4%, and for LHV Varahaldus from 25% to 26%, while the market share of Northern Horizon Capital fell from 4% to 3%. The largest fund manager in the Estonian market remains Swedbank Investeerimisfondid with 40% market share. It was followed by LHV Varahaldus with 26% market share, and SEB Varahaldus with 17%.
Tuleva Fondid stood out among mandatory pension funds as its market share grew from 3% to 4%, while the market share of Luminor Pensions Estonia fell from 9% to 8%. The largest second pillar pension fund in the Estonian market remains Swedbank Investeerimisfondid, which had 41% of the market. LHV Varahaldus had 28% of the market for mandatory pension funds, and SEB Varahaldus had 19%.
Having received its authorisation to operate as a fund manager for third pillar pension funds at the end of 2019 and managing index funds, Tuleva Fondid had 14% of the market for voluntary pension funds by the end of the year. The market share of LHV Varahaldus also increased, from 11% to 12%. The market position of other fund managers declined despite the growth in the assets of their pension funds, as the market share of Swedbank Investeerimisfondid fell from 51% to 45%, that of SEB Varahaldus fell from 24% to 20%, and that of Luminor Pensions Estonia fell from 10% to 9%.
18
Market share of public real estate funds as at the end of 2020 (end of 2019 in brackets)
EfTEN Capital 29% (26%)
19
Market share of equity funds as at the end of 2020 (end of 2019 in brackets)
Avaron Asset Management 28% (33%)
Swedbank Investeerimisfondid 69% (63%)
There were only two fund managers in the public real estate funds market, Northern Horizon Capital with 71% of the market and EfTEN Capital with 29%.
At the end of 2020 Swedbank Investeerimisfondid had the largest market share for equity funds with 69%, followed by Avaron Asset Management with 28%.
20
0
10,000
20,000
30,000
40,000
50,000
60,000
0
20
40
60
80
100
120
140
160
180
0
Number of people with the right to second pillar payouts (right scale) Their personal balance with the central securities depositary (left scale)
Number of people with the right to payouts and their account balances with the Estonian Central Securities Depositary (million euros)
21
Pensioners with a second pillar pension by type of payout as at the end of 2020 (end of 2019 in brackets)
No payouts received 20% (23%)
Pension contract 17% (17%)
Funded pension and one-o payout 14% (10%)
One-o payment only 20% (14%)
6. PAYOUTS FROM THE SECOND PENSION PILLAR
22 The account balance at the pensions register consists primarily of the account balances of people in the register who have chosen a funded pension, and of those who have not yet made a choice. Under a pension contract, the personal account balance is transferred to the insurance company. 23 One-off payments are when the whole pension fund is taken out at once. 24 A funded pension is an agreed schedule between the shareholder and the pension fund manager under which payments are made from the pension fund to the shareholder on a regular basis over a fixed period. 25 The pension contract is an insurance contract signed between a shareholder and a life insurance company under which the insurance company makes pension payments until the contract holder dies.
Data from Pensionikeskus show that 49,471 people had the right to payouts from the second pension pillar at the end of 2020, which was 4304 more than a year earlier. Of these, 36% were men and 64% were women. Their accounts in the pension register held 180.3 million euros of money not paid out on those accounts22. This amount increased sharply in the second half of 2019 when the pension reform was being developed, and it increased at the same rate in 2020. The account balance at the pension register grew fast because of a notable rise over the year in the number of people with the right to receive payouts who had not yet taken any decision about them. The account balance at the pension register also contained one-off payments of 41 million euros that had not yet been made at the end of 2020, but for which applications had been submitted.
There was a sharp rise in the number of one-off payments23 in the second half of 2020 after the reform of the second pillar was introduced, as there were around 11 thousand who had chosen that option as at the end of 2019, but over 17 thousand people who had chosen it by the end of 2020, with the growth coming in the second half of the year.
The share of people who chose only one-off payments increased over the year from 14% to 20% of those receiving payouts. The share of those receiving payouts as payments through both funds as a funded pension24 and one-off payments rose from 10% to 14%. The share of people who chose only funded pension payments fell over the year from 36% to 29% of those receiving payouts. The share of people who had signed pension contracts25 remained at 17%. The other 20% of those with the right to receive payouts from the second pension pillar had not yet applied to do so.
22
31.12.2019 30.06.2020 31.12.2020
VALUE OF PORTFOLIOS
26 Data on portfolio management cover all the market participants in Estonia who provide that service, including consultation. Their clients may be in Estonia or abroad.
Securities portfolio management services are provided by fund managers, banks and investment firms. The aggregate value of portfolios grew by 15% in 2020 to 685 million euros, having grown by 12% in 2019. The largest part of the growth came from banks, where the aggregate size of the portfolios under management increased from 467 million euros to 526 million.
The portfolio of clients managed by the fund managers increased from 102 million euros to 132 million over the year, while the portfolio managed by investment firms grew from 25 million euros to 27 million over the year.
Market share by size of portfolio (three largest): Swedbank grupp 51% LHV Pank 18% Luminor Bank 18% Volume of services: total size of portfolios 685 million euros
23
559 572 533
27 Financing institutions cover insurers, pension funds, credit institutions and other financing institutions. Companies includes state-owned and local government-owned companies. Private individuals also includes non-profit organisations. Government includes the state social assistance funds.
Most of the clients in the aggregate portfolio at the end of 2020 were residents of Estonia, who accounted for 88% of the total volume, or 601 million euros, which was up from 500 million euros at the end of 2019. Of this, 310 million euros belonged to financial institutions, 181 million euros to companies, 107 million euros to private individuals27, and 3 million euros to the government.
Non-residents had an aggregate portfolio of 84 million euros, the largest part of which belonged to residents of Latvia.
24
Market share of portfolio management by service provider as at the end of 2020 (end of 2019 in brackets)
Cresco Väärtpaberid 1% (1%)
Kawe Kapital 3% (3%)
LHV Pank 18% (16%)
Swedbank 32% (35%)
25
Market share of portfolio management for banks as at the end of 2020 (end of 2019 in brackets)
LHV Pank 23% (20%)
SEB Pank 12% (11%)
Swedbank 42% (45%)
PORTFOLIO MANAGERS Companies in the Swedbank group had the largest market share for portfolio management at the end of 2020, with 51% between them, followed by LHV Pank and Luminor with 18% each.
Among the banks, Swedbank had the largest portfolio at the end of the year with 42% of the market, followed by LHV Pank and Luminor Bank with 23% each.
Only two fund managers offered a securities portfolio management service, and of these, Swedbank Investeerimisfondid had the largest portfolio. There were also only two investment firms that offer portfolio management, and the one with the largest portfolio was Kawe Kapital.
8. THE LIFE INSURANCE MARKET Life insurance contracts are provided in Estonia by insurers registered in Estonia and Estonian branches of foreign insurers. Foreign insurers operating internationally mainly provide cross-border services in Estonia through Estonian insurance brokers, but the volume of such contracts is close to non-existent.
26
Estonian life insurers 52.8 million euros (55.7)
Branches of foreign life insurers 32.7 million euros (40.3)
International contracts intermediated in Estonia 0.5 million euros (0.4)
8.1 NEW SALES OF LIFE INSURANCE CONTRACTS In the first half of 2020, 24,004 new insurance contracts were signed in Estonia, which was fewer than the 27,030 new contracts signed in 2019. Insurance premiums of 17 million euros were written under those contracts in 2020, and 28 million euros in 2019. The biggest sales of new contracts were in the insurance agent segment, through which 13% of the insurance premiums from new contracts came. New insurance contracts were signed most through the insurer or an employee as a direct sale, and 86% of premiums from new contracts came in this way.
27
Insurance contracts signed through dierent sales channels by number of contracts in 2020 (2019 in brackets)
Direct sales 86% (63%)
Insurance agents 13% (37%) Insurance brokers 1% (0%)
8.2 INSURANCE COMPANIES PROVIDING LIFE INSURANCE
Insurance premiums28
28 The data on insurance premiums come from Statistics Estonia. 29 The data do not cover insurance premiums received from outside Estonia.
In 2020 the life insurance companies in Estonia received 86 million euros in insurance premiums29. In the previous year they received 96 million euros in premiums, meaning the volume had fallen by 11% over the year.
The decline in insurance premiums was due to a sharp reduction in the pension insurance premiums received. When the pension reform came in at the end of the year, there was a sharp drop in receipts of pension insurance premiums. Pension insurance premiums fell over the year from 18 million euros to 12 million. Insurance premiums for unit-linked life insurance also dropped substantially, as they fell over the year from 39 million euros to 34 million. Receipts of premiums for other types of life insurance were about the same as a year earlier.
The life insurance product that received the largest amount of premiums was again unit-linked life insurance, which had 40% of all life insurance products having had 41% a year earlier. Whole life insurance was in second place with a share of 24%, up from 21% the year before. Pension insurance came in third place with a share of 14%, down from 19% the year before. Capital endowment insurance accounted for 12% of all life insurance products, having been 11% a year previously.
Market share by insurance premiums (three largest): Swedbank Life Insurance SE 45% SEB Life and Pension Baltic Estonia branch 24% Compensa Life Vienna Insurance Group SE 17% Volume of services: insurance premiums of 86 million euros received in 2020
28
11
39
ns ur
an ce
2019 2020
29
Market share of life insurance by premiums received in 2020 (2019 in brackets)
SEB Life and Pension Baltic SE Estonia branch 24% (23%)
Compensa Life Vienna Insurance Group 17% (17%)
ERGO Life Insurance Eesti branch 6% (6%) Mandatum Life Insurance Company
Limited Estonia branch 8% (13%)
Swedbank Life Insurance 45% (41%)
30
Market share of capital endowment insurance as the end of 2020 (end of 2019 in brackets)
ERGO Life Insurance Estonia branch 10% (10%)
Mandatum Life Insurance Company Limited Estonia branch 5% (5%)
31
Market share of unit-linked life insurance as the end of 2020 (end of 2019 in brackets)
Mandatum Life Insurance Company Limited Estonia branch 17% (28%)
LIFE INSURANCE PROVIDERS Receipts of insurance premiums fell at all life insurers in 2020. The insurers were not all affected equally by the fall, and so this caused some changes in the division of the life insurance market. The market share of Mandatum Life Insurance Company Limited Estonia branch declined from 13% to 8% because of the fall in premiums for unit-linked life insurance. Swedbank Life Insurance SE managed to maintain its sales of life insurance products without any major reductions meanwhile, and so its market share increased from 41% to 45%. There was little change in the market shares of other life insurance providers.
The premiums for capital endowment insurance fell at the life insurers operating in Estonia for the 12th consecutive year including 2020. The market shares of insurers did not particularly change. The biggest provider of capital endowment insurance in Estonia at the end of 2020 was SEB Elu- ja Pensionikindlustus, which had 50% of the market.
There was a particularly large fall in receipts of premiums at Mandatum Life Insurance Company Limited Estonia branch in the unit-linked life insurance premiums segment, and so its market share fell from 28% to 17%. Swedbank Life Insurance SE was again the largest provider of unit-linked life insurance in Estonia, with 57% of the market.
Receipts of pension insurance premiums fell substantially at all insurers in 2020. Compensa Life Vienna Insurance Group SE again had the largest share of the pension insurance market with 82%. The market share of SEB Life and Pension Baltic Estonia branch fell from 19% to 10%, while the market share of ERGO Life Insurance Estonia branch fell from 12% to 8%.
Receipts of whole life insurance are rising each year and have doubled over the past six years. Swedbank Life Insurance SE had the largest market share with 61%, followed by SEB Life and Pension Baltic SE Estonia branch with 28%.
32
Market share of annuities as the end of 2020 (end of 2019 in brackets)
33
Market share of whole life insurance as the end of 2020 (end of 2019 in brackets)
Mandatum Life Insurance Baltic 3% (2%)
8.3 INSURANCE BROKERS INTERMEDIATING LIFE INSURANCE
Insurance premiums intermediated Insurance brokers registered in Estonia intermediated a total of 860,035 euros of life insurance premiums in 2020. Although the volume of insurance premiums intermediated increased by 25% over the year, the amount collected through brokers remains very small at below 1% of the life insurance premiums of Estonian insurers.
Insurance brokers mainly intermediated accident and illness insurance, for a total of 465 thousand euros, and other life insurance contracts worth 300 thousand euros. The most popular type of insurance among other life insurance contracts was risk life insurance. Annuity payments of 95 thousand euros were intermediated, while no premiums for unit-linked life insurance were intermediated at all.
The life insurance brokers in Estonia also intermediate a lot of contracts from insurers in countries of the European Economic Area, and in 2020 these accounted for 54%, or 466 thousand euros, of the insurance premiums of brokers, having been 65% or 446 thousand euros a year earlier.
Market share by insurance premiums (three largest): KindlustusEst Kindlustusmaakler 29% IIZI Kindlustusmaakler 26% UADBB Aon Baltic Estonia branch 5% Clients: 786 contracts intermediated Volume of services: insurance premiums of 860 035 euros were intermediated in 2020
34
Other types
2019 2020
Insurance premiums intermediated through insurance brokers by type of life insurance (thousand euros)
INSURANCE BROKERS There were 11 insurance brokers intermediating life insurance contracts in 2020.
Because the volume of premiums intermediated is small, the market shares of life insurance brokers are quite volatile, as each new contract can affect the market share of its broker substantially. KindlustusEst Kindlustusmaakler had the largest share in 2020 with 29%. It was followed by IIZI Kindlustusmaakler with market share of 26%, and UADBB Aon Baltic Estonia branch with 25%.
35
Market share of insurance brokers by life insurance premiums received in 2020 (2019 in brackets)
Other* 3% (5%)
Marsh Kindlustus- maakler 11% (0%)
UADBB MAI Baltics Estonia branch3% (3%)
ABC Kindlustusmaaklerid 3% (0%)
* The market shares of other insurance brokers intermediating life insurance were: Vagner Insurance Broker AS 1.7%, Pro Kindlustusmaakler OÜ 1.0%, Kominsur Kindlustusmaakler OÜ 0.6%, InPro Insurance Brokers OÜ 0.1% and Ultima Kindlustusmaakler OÜ 0.1%.
36
Volume of insurance premiums in non-life insurance in 2020 (2019 in brackets)
Estonian non-life insurers 265 million euros (287)
Branches of foreign non-life insurers 118 million euros (111)
International contracts intermediated in Estonia 35 million euros (38)
9. THE NON-LIFE INSURANCE MARKET Non-life insurance contracts are provided in Estonia by insurers registered in Estonia, Estonian branches of foreign insurers, and foreign insurers operating internationally. Cross-border services are mainly provided in Estonia through Estonian insurance brokers.
37
Insurance contracts signed through dierent sales channels by premiums 2020 (2019 in brackets)
Direct sales 52% (50%)
Insurance agents 17% (17%)
Insurance brokers 31% (33%)
9.1 NEW SALES OF NON-LIFE INSURANCE CONTRACTS
30 This amount includes internal group agents.
In 2020, 2,972,932 new insurance contracts were signed in Estonia, which is just a little fewer than last year, when 3,082,498 contracts were signed. Premiums received under them were 386 million euros in 2020 and 397 million euros in 2019. Insurance contracts were mainly signed with the insurer or an employee as a direct sale, and 52% of premiums from new contracts came in this way. Around 17% of the premiums from new contracts came through insurance agents30 and 31% came through insurance brokers.
9.2 INSURANCE COMPANIES PROVIDING NON-LIFE INSURANCE31
Insurance premiums32
31 Data on non-life insurance cover only contracts signed in Estonia and do not include contracts signed by branches of Estonian insurers abroad. 32 The data on insurance premiums and payouts come from Statistics Estonia. 33 Travel insurance is recorded under accident and illness insurance.
The Covid-19 crisis that broke out at the start of the year reduced sales of insurance contracts in Estonia, though the volume of insurance premiums fell by only 3.7%. Non-life insurance companies operating in Estonia and branches of foreign non-life insurers received a total of 383 million euros in insurance premiums in 2020, down from 398 million a year earlier. Estonian branches of foreign insurers received 31% of all insurance premiums, or 118 million euros.
The three insurance products that were most affected by the crisis were motor third-party liability insurance, land vehicle insurance and travel insurance33. Premiums for motor third- party liability insurance fell from 102 million euros a year earlier to 90 million. This is also partly because tariffs were cut because of price competition. Premiums for land vehicle insurance, also known as Casco insurance, were down from 126 million euros to 119 million. Premiums for travel insurance fell from 18.6 million euros a year earlier to 11.7 million.
Insurance premiums increased for other products though, which were property insurance, financial loss insurance, and other vehicles and transportable goods insurance. Premiums for health insurance increased by 0.9 million euros over the year to 2 million euros. This is a supplementary insurance taken out by employers with the state health insurance
system on behalf of employees, which may gain further in popularity because of the ongoing coronavirus pandemic.
The crisis also had some positive impact on the operations of insurers. The restrictions in the spring reduced traffic volumes and so the number of cases of loss related to vehicles fell, and this reduced the need to pay out compensation. Compensation paid out fell most for land vehicle insurance, for which it declined from 84 million euros to 80 million, and for motor vehicle liability insurance, where it fell from 60 million euros to 57 million. Compensation of 214 million euros in total was paid out in 2020, which was 4 million euros less than a year earlier.
Market share by insurance premiums (three largest): IF P&C Insurance AS 19% Swedbank P&C Insurance 19% ERGO Insurance 18% Number of contracts: 2,972,932 Volume of services: insurance premiums of 383 million euros were received in 2020
38
39
60
13
84
2
52
Non-life insurance payouts by type of insurance (million euros)
INSURANCE PROVIDERS The merger of Seesam Insurance and Compensa Vienna Insurance Group, ADB Estonia branch was carried out in the second half of 2020, during which the insurance portfolio of Seesam Insurance was transferred to Compensa Vienna Insurance Group, ADB Estonia branch. At the end of the year Compensa Vienna Insurance Group, ADB Estonia branch had a significant part of the non-life insurance market in Estonia, with 13% of the insurance premiums received. AS LHV Kindlustus was added to the list of non-life insurers in the last days of the year, but its market share was very small.
The biggest insurer was If P&C Insurance, which increased its market share from 18% to 19% despite the difficult year. Swedbank P&C Insurance had almost the same market share at around 19%. ERGO Insurance was one of the few insurers that saw insurance premiums received increase in 2020, and so its market share grew from 16% to 18%.
Motor third-party liability insurance premiums were down at almost all insurers, but to differing extents, and this caused some changes in the division of the market for that type of insurance. The biggest decline was in the market share of Inges Kindlustus, from 8% to 6%. The largest market share in motor third-party liability insurance was held by ERGO Insurance SE with 20%, followed by AB Lietuvos draudimas Estonia branch and If P&C Insurance with 15% each.
40
Market share of non-life insurance premiums received in 2020 (2019 in brackets)
Akciné draudimo bendrové Gjensidige Estonia branch 2% (2%)
Lietuvos draudimas Estonia branch 15% (16%)
BTA Baltic Insurance Company Estonia branch 6% (7%)
ERGO Insurance 18% (16%)
Inges Kindlustus 1% (2%) Other 2% (1%)
Salva Kindlustus 5% (6%)
Compensa Vienna Insurance Group, ADB Estonia branch 13% (13%*)
* The market share of Compensa Vienna Insurance Group, ADB Estonia branch in 2019 includes that of Seesam Insurance.
41
Market share for motor third party liability insurance as at the end of 2020 (end of 2019 in brackets)
ERGO Insurance 20% (20%)
Inges Kindlustus 6% (8%)
Compensa Vienna Insurance Group, ADB Estonia branch 11% (11%*)
* Market share for motor third party liability insurance as at the end of 2020 (end of 2019 in brackets)
42
ERGO Insurance SE 15% (14%)
If P&C Insurance 20% (18%)
Swedbank P&C Insurance 21% (22%)
43
ERGO Insurance SE 12% (11%)
If P&C Insurance 24% (24%) Salva Kindlustus 5% (7%)
Swedbank P&C Insurance 20% (20%)
Compensa Vienna Insurance Group UADB Estonia branch 16% (16%*)
Telia Försäkring Estonia branch 4% (2%)
Insurance premiums for land vehicle insurance were also down at almost all insurers. Swedbank P&C Insurance with 21% and If P&C Insurance with 20% had the largest market share.
Receipts of premiums for property insurance varied widely, as they increased at some insurers, with the biggest increase at Telia Försäkring AB Estonia branch, while they fell at others, with the biggest fall at Salva Kindlustus. If P&C Insurance had 24% market share in property insurance, and Swedbank P&C Insurance had 20%. Compensa Vienna Insurance Group, ADB Estonia branch was third with 16% after its merger with Seesam Insurance.
9.3 INSURANCE BROKERS INTERMEDIATING NON-LIFE INSURANCE
Insurance premiums intermediated
34 As well as contracts with insurers, contracts with foreign reinsurers were also intermediated by brokers, but they are not covered in this review. They received 0.7 million euros in insurance premiums in 2020.
Insurance brokers registered in Estonia intermediated non-life insurance premiums of 166 million euros in 202034, which was 10 million euros less than in 2019. The number of contracts intermediated fell by 67,335 to 731,478.
The largest type of insurance by insurance premiums intermediated by brokers was insurance for land vehicles, where 45 million euros of insurance premiums were intermediated, which was 4 million euros less than in 2019. Insurance premiums of 37 million euros were intermediated for motor third-party liability insurance, which was 8 million euros less. The third largest type of insurance was property insurance with 35 million euros of insurance premiums.
Estonian insurance brokers intermediate contracts from both Estonian and foreign insurance companies. In 2020, 79% or 131 million euros of all the insurance premiums intermediated were those of Estonian insurance companies, and 21%, or 35 million euros, went to foreign insurers. The largest share of the contracts of foreign insurers were the 16 million euros of insurance for other vehicles and goods under transport, followed by 10 million euros of insurance against monetary loss, and 5 million euros of property insurance. In 2020,
34% of all the non-life insurance premiums taken in by Estonian insurers came through brokers. The biggest shares of premiums through brokers were of 79% in insurance for other vehicles, covering air and water transport, and of 42% in third-party motor insurance.
Market share by insurance premiums (three largest): IIZI Kindlustusmaakler 30% Marsh Kindlustusmaakler 16% KindlustusEst Kindlustusmaakler 6% Clients: 731,478 contracts intermediated Volume of services: insurance premiums of 166 million euros were intermediated in 2020
44
45
6
49
21
35
Insurance premiums intermediated through insurance brokers by type of non-life insurance (million euros)
45
44%
15%
39%
63%
27%
Share of insurance premiums intermediated through insurance brokers of insurers operating in Estonia
46
Market share of insurance brokers by non-life insurance premiums received in 2020 (2019 in brackets)
Other* 30% (30%)
CHB Kindlustusmaakler 5% (5%) Vandeni Kindlustus- maaklerid 5% (5%)
Kominsur Kindlustusmaakler 4% (3%)
47
Fix Kindlustusmaakler 3% (3%) Smart Kindlustusmaakler 3% (3%)Marsh Kindlustusmaakler 3% (2%)
Market share of insurance brokers for motor third-party liability insurance as at the end of 2020 (end of 2019 in brackets)
48
UADBB Aon Baltic Estonia branch 3% (4%)
Aadel Kindlustusmaaklerid 3% (3%)
Vagner Insurance Broker 3% (4%) ABC Kindlustusmaaklerid 3% (3%)
Market share of insurance brokers for land vehicle insurance as at the end of 2020 (end of 2019 in brackets)
INSURANCE BROKERS There were 40 insurance brokers intermediating non-life insurance contracts in 2020. The majority of the market is divided between only a few brokers though, as 82% of insurance premiums were intermediated by 11 insurance brokers. IIZI Kindlustusmaakler held the largest market share with 30%, followed by Marsh Kindlustusmaakler with 16% and KindlustusEst Kindlustusmaakler with 6%.
At the end of 2020 IIZI Kindlustusmaakler had the largest market share for third-party motor insurance with 58%, followed by KindlustusEst Kindlustusmaakler with 8% and CHB Kindlustusmaakler with 4%.
The largest market share for insurance of land vehicles was held by IIZI Kindlustusmaakler with 42%, followed by KindlustusEst Kindlustusmaakler with 9% and Smart Kindlustusmaakler with 7%.
* The market shares of other insurance brokers intermediating non-life insurance were: UADBB Aon Baltic Estonia branch 3.13%, GrECO Speciality GmbH Estonia branch 3.02%, Vagner Insurance Broker AS 2.73%, AS Smart Kindlustusmaakler 2.57%, OÜ ABC Kind- lustusmaaklerid 2.40%, Aadel Kindlustusmaaklerid OÜ 2.31%, Fix Kindlustusmaakler OÜ 1.98%, Optimal Kindlustusmaakler OÜ 1.51%, Credo Kindlustusmaaklerid OÜ 1.27%, NB Kindlustusmaakler OÜ 1.23%, Ultima Kindlustusmaakler OÜ 1.19%, OÜ TIIB Kindlustus- maakler 0.96%, OÜ Kindlustusmaakler Tiina Naur 0.87%, Pro Kindlustusmaakler OÜ 0.64%, OÜ Marks ja Partnerid Kindlustusmaaklerid 0.50%, UADBB MAI Baltics Estonia branch 0.46%, Coop Kindlustusmaakler AS 0.45%, Avor Kindlustusmaakler OÜ 0.38%, Foxtall Kindlustusmaakler OÜ 0.36%, FS Kindlustusmaakler OÜ 0.32%, Lõuna Kindlustusmaakler OÜ 0.29%, 1Kindlustusmaakler OÜ 0.28%, Northern1 Insurance Solutions Kindlustus- maakler OÜ 0.21%, Clemenc Kindlustusmaakler OÜ 0.21%, Premium Kindlustusmaakler OÜ 0.14%, AVC Advisory Kindlustusmaakler OÜ 0.10%, InPro Insurance Brokers OÜ 0.07%, Vector Kindlustusmaakler OÜ 0.05% AID Kindlustusmaakler OÜ 0.04%, Direct Kindlus- tusmaakler OÜ 0.03% Advan Kindlustusmaakler OÜ 0.02%, Allier Kindlustusmaakler OÜ 0.00% and EDRAUDA, UADBB Estonia branch 0.00%.
49
IIZI Kindlustusmaakler 17% (18%)
UADBB Aon Baltic Estonia branch 4% (6%)
ABC Kindlustus- maaklerid 4% (3%)
Vandeni Kindlustus- maaklerid 4% (4%)
Aadel Kindlustus- maaklerid 3% (3%)
Vagner Insurance Broker 3% (2%) Fix Kindlustusmaakler 3% (2%)
Market share of insurance brokers for property insurance as at the end of 2020 (end of 2019 in brackets)
50
Kindlustusmaakler 9% (9%)
Marsh Kindlustus- maakler 6% (4%)
CHB Kindlustus- maakler 6% (3%)
ABC Kindlustus- maaklerid 6% (5%)
Vagner Insurance Broker 6% (4%)
Optimal Kindlustus- maakler 5% (4%)
Aadel Kindlustusmaaklerid 3% (3%) UADBB Aon Baltic Estonia branch 3% (2%)
Market share of insurance brokers for travel insurance as at the end of 2020 (end of 2019 in brackets)
Table 3. The largest non-life insurance brokers by intermediation fees received
Broker Market share 2020 2019
IIZI Kindlustusmaakler AS 37% 40% Marsh Kindlustusmaakler AS 9% 9% KindlustusEst Kindlustusmaakler OÜ 7% 7% CHB Kindlustusmaakler OÜ 6% 6% Kominsur Kindlustusmaakler OÜ 5% 3% AS Vandeni Kindlustusmaaklerid 4% 4% Vagner Insurance Broker AS 3% 3% AS Smart Kindlustusmaakler 3% 3% Aadel Kindlustusmaaklerid OÜ 3% 3% OÜ ABC Kindlustusmaaklerid 3% 3% Marine Insurance Services SIA Estonia branch 3% 2% UADBB Aon Baltic Estonia branch 2% 3% Fix Kindlustusmaakler OÜ 2% 2% GrECo Specialty GmbH Estonia branch 2% 1% Optimal Kindlustusmaakler OÜ 2% 2%
The market leader in property insurance was IIZI Kindlustus- maakler with 31% followed by Marsh Kindlustusmaakler with 17% and CHB Kindlustusmaakler with 10%.
IIZI Kindlustusmaaklerile also had the largest market share for travel insurance with 39%, followed by KindlustusEst Kindlustusmaakler with 9% and Marsh Kindlustusmaakler with 6%.
Non-life insurers received 22.5 million euros in intermediation fees in 2020, down from 23.5 million euros in 2019, and 89% of those fees were received by 15 of the 40 insurance brokers.
10. PAYMENT SERVICES The Covid-2020 pandemic did not have any serious impact on the payment services sector in 2020.
Some 342 million euros in payments were intermediated in 2020, down from 429 million euros a year earlier, and 6.6 million payments were made in total, down from 7.6 million. The services provided by Coop Finants AS are no longer classed as payment services from the second quarter, and so the data from Coop Finants AS are not recorded in the payment volumes of the sector. As Coop Finants AS intermediated a large number of payments, the number of payments of the whole sector has been reduced.
The largest volume of payments in 2020 was at Maksekeskus, with 71% of all payments, followed by TavexWise with 16% and Coop Finants with 5%.
The largest market share by number of payments was held by Maksekeskus, which intermediated 73% of all payments.
Market share by volume of payments (three largest): Maksekeskus 71% TavexWise 16% Coop Finants 5% Volume of services: Payments of 342 million euros
70
Market share of payment institutions as at the end of 2020 (end of 2019 in brackets)
Other 2% (1%) Pocopay 2% (2%)
Coop Finants 5% (18%)
69
Volume and number of payments at payment institutions in half years
Volume of payments Number of payments
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
100
200
300
400
500
600
700
800
900
1,000
2. Deposits
4. Loans issued by creditors
5. Investment and pension funds
6. Payouts from the second pension pillar
7. Management of securities portfolios
8. The life insurance market
9. The non-life insurance market
10. Payment services

as at 31 december 2020

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