Press Release

EPSI Baltic Countries
Insurance B2C*
2009

Press Release – EPSI Baltic Countries 2009
Insurance providers (B2C)

• Satisfaction
• Overall picture of customer satisfaction with insurance companies in Baltic countries is rather mixed in 2009;
• Lithuania is leading with satisfaction level of 80.1 out of 100 in Baltic countries. Latvia is on the second place with 74.5 points and Estonia is the last with 72.8 points out of 100;
• The level of customer satisfaction in Lithuania almost did not change this year compared to 2008;
• The level of customer satisfaction dropped by 3.3 points in Estonia in 2009;
• The level of customer satisfaction in Latvia improved by 3.1 points compared to scores of 2008;
• The most notable result for Latvian companies is a rapid satisfaction level growth for Balta: plus 5.5 points in 2009;
• Balta is also leading in the Latvian market with 76.4 points;
• Lietuvos Draudimas is as a leading company for the second year in Lithuania in terms of customer satisfaction with 83.6 points;

• Loyalty
• Situation with customer loyalty is similar to their satisfaction situation: Lithuania (82.2 points out of 100) is leading, while Latvia (76.4) is on the second place and Estonia (75.2) is the last one among the Baltic countries;
• The strikingly big drop in loyalty experiences Estonia in 2009: - 7 points.
• Loyalty in Latvia slightly grows by 2 points in 2009 comparing to 2008
• Lithuania does not experience any significant change in loyalty levels this year.
• Only Ergo in Lithuania experiences a statistically significant decrease of 2.7 points in Lithuania, still having this year high score of 81.5 points out of 100;
• The leader in terms of loyalty in Lithuania is Lietuvos Draudimas with 86.9 points, which is also the highest level among all insurance companies operating in Baltic countries.
• In Latvia, Balta is the only company which faces a statistically significant change in level of customers’ loyalty: an increase of 4 points.
• Balta is also a leader in terms of loyalty with 78 points in 2009 in Latvia;
• The biggest insurance companies in Estonia faced a serious drop in their customers’ loyalty levels: -7.8 points for If Eesti Kindustos, -8.1 for Ergo and -6.5 for Seesam;
• For the second year in a row Ergo is doing best of other biggest insurance providing companies in Estonia in terms of loyalty level among its customers (77.2).

These are some of the results from the recently conducted studies among the insurance providing companies’ consumers in the three Baltic countries. The study has been conducted as an integral part of the Pan European Performance Satisfaction Initiative (EPSI Rating). This is the second wave in the Baltic States. It is done in order to support the development of customer oriented and driven services throughout Europe.

The study is based on interviews with more than 2,500 individual customers representing all three Baltic States. The data collection company Runway conducted it through telephone. EPSI Rating using the same approach and model as in the 18 countries that are part of the initiative does all analysis. Thus, the results can be compared with those available on an annual basis from many other European countries.

The satisfaction index is reported on the scale 0 – 100. The higher score corresponds to more satisfied customers. Averages usually fall in the region 60 – 75. Any company receiving a score above 75 has a strong position among its customers, while those below 60 face risks of loosing the customer base. The statistical precision is good for the overall results, and a difference of 2 units or more for the country average is significant.

• Satisfaction

Customers’ satisfaction is basics for a long-term sustainable business development that is why company strategy could be directed by EPSI (Extended Performance Satisfaction Index).

Overall picture of customer satisfaction with insurance companies in Baltic countries is rather mixed this year (see table 1, graph 1):

• Lithuania is leading with satisfaction level of 80.1 out of 100 in Baltic countries. Latvia is on the second place with 74.5 points and Estonia is the last with 72.8 point out of 100.
• The level of customer satisfaction in Lithuania almost did not change this year compared to 2008;
• The level of customer satisfaction dropped by 3.3 points in Estonia in 2009;
• The level of customer satisfaction in Latvia improved by 3.1 points compared to scores of 2008.

Although, both positive and negative changes have taken place, it might be concluded that overall insurance companies’ customers in all Baltic countries are rather satisfied with their insurance providers, as compared to other countries observed (see table 3).

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Talking about the satisfaction levels on company level, it can be noted that three out of four biggest Insurance providing companies in Estonia face a statistically significant decrease in customer satisfaction levels: If Eesti Kindustos (-2.2), Ergo (-5.3 ) and Seesam (-4.4) in 2009 in comparison to 2008. Overall, the results for all the companies in Estonia are pretty close, ranging from 71.5 to 73.3 point out of 100.

The most notable result for Latvia, is a rapid satisfaction level growth for Balta: plus 5.5 points in 2009. This company is also leading in the Latvian market with 76.4 points.

There are 5 main players on the market of non-life insurance in Lithuania: AB Lietuvos Draudimas, UAB DK PZU Lietuva, UADB ERGO Lietuva, UAB BTA Draudimas, and UAB If Draudimas holding together more than 80% of the market. This year, all of them were included into the study. The satisfaction levels for all the companies range from 77.3 points (UAB BTA Draudimas) to 83.6 points (Lietuvos Draudimas). No statistically significant changes for Ergo or Lietuvos Draudimas are observed compared to the 2008 outcomes. Thus, Lietuvos Draudimas is leading for the second year in Lithuania.

 according to the data of Insurance Supervisory Commission of the Republic of Lithuania

• Loyalty

• The situation with customer loyalty is similar to their satisfaction situation: Lithuania (82.2 points out of 100) is leading, while Latvia (76.4) is on the second place and Estonia (75.2) is the last one among the Baltic countries (see table 2, graph 2). 
• The strikingly big drop in loyalty experiences Estonia in 2009: - 7 points.
• Loyalty in Latvia slightly grows by 2 points in 2009 comparing to 2008.
• Lithuania does not experience any significant change in loyalty levels this year.

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On the company level, for most of the companies studied in Lithuania and Latvia no significant both positive or negative changes could be observed in loyalty level changes in 2009 in comparison to 2008. However, in Estonia striking drops in customers’ loyalty levels take place. The situation is even more severe than situation with satisfaction levels in this country:

• Only Ergo in Lithuania experiences a statistically significant decrease of 2.7 points in Lithuania; However, still having this year high score of 81.5 points out of 100;
• The leader in terms of loyalty in Lithuania is Lietuvos Draudimas with 86.9 points, which is also the highest level among all insurance companies operating in Baltic countries.
• In Latvia, Balta is the only company which faces a statistically significant change in level of customers’ loyalty: an increase of 4 points.
• Balta is also a leader in terms of loyalty with 78 points in 2009 in Latvia;
• The biggest insurance companies in Estonia, which were also observed last year faced a serious drop in their customers’ loyalty levels, which equals minus more than 6 points for each company: -7.8 points for If Eesti Kindustos, -8.1 for Ergo and -6.5 for Seesam;
• For the second year in a row Ergo is doing best of other biggest insurance providing companies in Estonia in terms of loyalty level among its customers (77.2).

Linkage between customers’ loyalty and satisfaction 

There is a strong positive relationship between Satisfaction and Loyalty for observed insurance providing companies having operations in Baltic countries, as showed at Graph 3. In most cases, Loyalty is higher than Satisfaction for every respected country/company. It means that these companies are able to effectively manage clients’ loyalty via factors effecting their satisfaction.

It is also important information for companies for better understanding of companies positioning on the market and their customers’ behavior in different countries. Thus, EPSI can be used as an effective assessment and priority setting tool for performance improvement.

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EPSI Rating – Nordic and Baltic Insurance trends

The Insurance sector has been measured in the majority of Nordic countries since year 1999 in annual studies. The coverage has successively been increased and in 2007 General Insurance with both final Consumers and Corporate Customers are covered in the majority of the Nordic markets. In 2008 the assessment has also been added with the Baltic countries (for final consumer general insurance).

Below a few key trends and benchmark results are given for the recent year studies(Iceland to be added later on).

General Insurance Private Consumer segment

In the diagram below, the private consumers in the respective country give the scores of their General Insurance company. The average for the entire region (calculated as the GDP-weighted average of the respective country result) has increased significantly during the period 2004 - 2009. The financial turmoil experienced in all the studied countries during the last year has not had any negative effects on satisfaction to insurance company. Satisfaction is in this sector to a large extent driven by trust and it is clear from the results that the citizens  have equally high trust in their insurance company now as before the crisis.

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Lithuania, Denmark and Finland are now on top and Norway lowest in customer satisfaction according to their customers. The improvements in Finland, Norway and Sweden are all statistically significant, as well as the one recorded for Latvia. The decrease in satisfaction for Estonia is also significant.

General Insurance corporate customer market

The coverage of also corporate Markets for General Insurance has successively been increased. The results for the last five years are illustrated in the diagram and table below.

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Satisfaction went down in most Nordic countries last year. Now, the trend in satisfaction has gone up again slightly for the region. The decrease in Denmark is statistically significant since last year as well as the improvements in Norway and Sweden are.

Among Nordic Insurance groups measured in three or more countries TrygVesta is scored highest by their customers also in 2009. If has had the best improvements on average and is now approaching the top contenders in a number of markets, according to their respective customers.

In addition to measurements of satisfaction also loyalty and its drivers are analyzed in the EPSI studies. For more details, see the national press releases. You are also welcome to contact the staff at EPSI rating and its respective entities. For contact links see the web-portal: www.epsi-rating.com.

EPSI in scope

Further details about the Baltic results are found on the EPSI Baltics web-site: www.epsi-baltics.org.
More information about the results for the Baltic Insurance sector can also be obtained from
Gunnar Ljungdahl on E-mail: Gunnar.Ljungdahl@epsi-baltics.org, phone: +371-29419055 or +371-7015851 and
Jelena Alohina on E-mail: jelena.alohina@epsi-baltics.org, phone: +371 29782758.
For more information about Pan-Nordic trends contact: Jan Eklöf, phone:+46-70-6964185, E-mail: jan.eklof@epsi-rating.com,www.epsi-rating.com