Compensa Vienna Insurance Group takes first place in the list of Lithuanian Financial Business Leaders 2021

Compensa Vienna Insurance Group takes first place in the list of Lithuanian Financial Business Leaders 2021

The non-life insurance company Compensa Vienna Insurance Group ranked first in the list of Lithuanian Financial Business Leaders 2021 compiled by Verslo žinios. Last year, the Compensa Vienna Insurance Group’s insurance premiums increased by 44.5 percent and its pre-tax profit grew by as much as 357.4 percent.

“We are extremely pleased and proud of this recognition from Verslo žinios. Compensa Vienna Insurance Group has been pursuing a leading position since 2016. During this period of time, its amount of written insurance premiums has almost tripled, while it has established itself in the corporate property insurance segment and the number of loyal customers has increased. The results for 2020 have been boosted by a successful merger with Seesam Insurance and the company’s focus on overcoming the challenges caused by the pandemic,” said David Raipa, Chairman and General Manager of Compensa Vienna Insurance Group.

Challenging year for the market

Last year, the global pandemic presented many challenges, but the competitive insurance sector was able to manage these through companies were dynamic and flexible in adapting to the new working conditions, looking for more efficient solutions, and optimising costs to generate good results when compared to the financial sector as a whole. 

The Baltic non-life insurance market shrank by just over 3 percent. This was a trend driven by declining transport and travel insurance, with all the other insurance segments showing growth. This means that both residents and businesses understand the meaning of the insurance service, and it can be expected that this market contraction caused by the circumstances of the pandemic will be temporary.

Compensa Vienna Insurance Group quickly adapted to remote work and operations with minimal physical contact, and has fundamentally changed certain of its business processes. But while we faced challenges in all areas, at the same time, the fall in the performance of our own sales network was relatively little, meaning that our employees were resilient to change. 

Strategic decision has been implemented

In 2020, Compensa Vienna Insurance Group not only overcame the challenges resulting from the pandemic, but also implemented a strategic decision to merge the two non-life insurance companies operating in the Baltic States: Seesam Insurance and Compensa Vienna Insurance Group. 

“While the merger of these companies was successfully implemented, we concentrated all our experience, competencies and good practices, to streamline our processes and provide more insurance solutions to our customers. As a result, we recorded growth in our written insurance premiums and our market share,” said Raipa.

Following the merger, Compensa Vienna Insurance Group took advantage of the opportunities for closer cooperation and integration in all three Baltic States to strengthen its position. In 2020, the amount of premiums allocated by Compensa Vienna Insurance Group in Lithuania reached EUR 56.9 million, representing an increase of 23.5 percent compared to 2019. In addition, the amount of insurance premiums issued in Latvia amounted to EUR 36.3 million (38.4 percent higher), while in Estonia, the company has issued EUR 29.1 million in insurance premiums (135.9 percent more than the previous year).

According to Raipa, the merger has created opportunities to become a more universal insurer, as Seesam Insurance and Compensa Vienna Insurance Group, while culturally similar, also had some specific competitive advantages. One of the primary goals of the merger was maintain these benefits and to take advantage of them.

Customers can also see the benefits of the merger, as the company now has a wider product basket and is now able to better respond to their needs. For example, while Seesam Insurance held a stronger position in health and travel insurance services, Compensa Vienna Insurance Group was stronger in terms of corporate property insurance.

Raipa emphasised the importance of sustainability in the implementation of this relatively aggressive growth: “We are constantly strengthening our experience, risk management, pricing and segmentation, while also managing our losses in order to make sure that our product portfolio is balanced and that we can achieve our goals in terms of both the market share and profitability. The successful merger has further strengthened the long-term work of and team – in 2020, we managed to reach a critical mass in our operations that allowed us to finally start generating a profit.”

Consistent work towards achieving our goal

This year, the pandemic and the period of uncertainty has continued; therefore, Compensa Vienna Insurance Group has consistently pursued its goal of reaching a Top 3 position in the Baltic States.

“We can see both the potential and challenges which have been caused by our newly formed habits – if at the beginning of the pandemic most people considered the forced relocation to the digital space as a temporary solution, it is now clear that  in-person and remote services will continue to be combined even after the restrictions have been lifted. We will continue to improve our processes so that, in the long run, we can ensure a high-quality service provision and the administration of claims in a way that is safe and convenient for our customers,” said Raipa.

The company’s results this year continue to be affected by the merger. In the first half of 2021, the market share of Compensa Vienna Insurance Group reached 10.5 percent (compared to 7.6 percent in the first half of 2020) in Lithuania, and 11 percent (6.1 percent in the first half of 2020) in the Baltic States, respectively. 

The amount of insurance premiums issued by Compensa Vienna Insurance Group in the first half of 2021 grew by 46.2 percent in Lithuania and by 88.8 percent in the Baltic States. Furthermore, the profitability of its operations in the Baltic States increased by 402.4 percent. 

According to Raipa, the largest growth in Lithuania is currently demonstrated by the popularity of CASCO insurance for both natural and legal customers, as well as property insurance for the  country’s residents. The growth of other services has been consistent. In addition, the sales of health and travel insurance have stabilised, as we have combined good practices and experiences during the merger of our companies, but it will take some more time to establish ourselves in the eyes of our partners and customers.

Methodology of the Business Leaders 2021 ranking 

When creating the list of the Business Leaders 2021, Verslo žinios ranked the largest companies in the sector according to 9 indicators: estimated income for 2020 (amount of premiums issued for insurance companies), profit before tax, profitability, change in income, change in profit before tax, profit per employee, change in the return on assets, ratio of salary paid in the company to the average salary in companies engaged in the same activity, and the amount of attention from Verslo žinios readers considering the positive or negative context.