After recording negative growth in 2009 and 2010 due to the economic crisis, the Latvia insurance market registered positive growth in 2011 with the revival of the economy. The key factors affecting the performance of the industry during the review period (2008–2012) included the country's poor economic situation and the increasing amount of risk being retained by insurers. The Latvian insurance industry decreased at a negative CAGR of -4.4% over the review period, primarily due to a decline in growth in the non-life insurance segment. The financial crisis, European debt crisis, and falls in equity and bond prices also had a negative effect.
The life insurance segment in Latvia is highly underdeveloped. The segment is controlled predominantly by subsidiaries of giant multinationals such as Swedbank Life Insurance, SEB Life & Pensions International, Mandatum Life and ERGO. Latvian non-life insurance companies are increasingly expanding into Estonia and Lithuania to offset stagnating premiums in the domestic market.
BTA Insurance Company SE (BTA) announced the launch of agriculture insurance in Latvia in January 2013. It is the first company to offer agriculture insurance in the country. BTA will insure sowings against storms, floods, hail and destruction by frost in winter. Farmers will pay 50% of the policy value, while the remainder will be funded through state aid granted under the Rural Support Service which will be available until the end of 2013.
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