Life insurance plays an essential role in the Luxembourg financial services industry, offering vital security and wealth-building opportunities.

Despite challenging macroeconomic factors like interest rate changes and regulatory evolutions, Luxembourg's life insurance market remains resilient and robust. Our detailed report concisely analyses key statistics and trends, providing valuable insights into the sector's performance and dynamics.
 

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Key takeaways

• The 2022 surge in interest rates drove a significant fall in premium collection and a rise in surrenders. This continued into 2023 with a 17.8% drop in gross written premiums (GWP), mainly due to a decline in investment contracts’ GWP.
• Life insurance distribution was mostly through brokers (48.3%) and banks (34.3%), both experiencing slight decreases in 2023. Single premium contracts accounted for 80.7% of 2023’s GWP.
• There was an overall decline across all principal markets in 2023, with France and Italy still leading the pack despite enduring notable premium falloffs. Other EEA and non-EEA markets also showed serious downticks.
• Investment strategies for traditional life insurance remained bond-focused (65.7%), with a stable proportion of government (~25%) and corporate bonds (~41%). While more index-linked and unit-linked contracts were invested in collective investments and equities.
• The solvency capital requirement (SCR) of Luxembourg insurance companies remained stable at just below 200%, with key contributors being life underwriting and market risks, weighting for a respective 43.7% and 51.9% of Basic Solvency Capital Requirement pre-diversification.

Benchmarking your business

In this challenging economic environment, (re)insurers must benchmark themselves against their competitors to:

• Gain a comprehensive understanding of market dynamics and competitor strategies, helping them make informed, strategic decisions that fuel growth and innovation;
• Identify strengths and weaknesses across various aspects of their business to drive targeted improvements and gain a competitive edge; and
• Ensure compliance with regulatory standards while adopting best practices in risk management, strengthening their company's resilience and long-term stability.

By partnering with Deloitte, your insurance company can harness the full power of our advanced benchmarking services, including comprehensive and data-driven market insights and tailored recommendations.

Contact us for more information