EKONOMIA ECONOMICS Publishing House of Wrocław University of Economics Wrocław 2011

Transkrypt

1 EKONOMIA ECONOMICS Publishing House of Wrocław University of Economics Wrocław 2011

2 Copy-editing Elżbieta Macauley, Tim Macauley, Marcin Orszulak Layout Barbara Łopusiewicz Proof-reading Barbara Łopusiewicz Typesetting Małgorzata Czupryńska Cover design Beata Dębska This publication is available at Abstracts of published papers are available in the international database The Central European Journal of Social Sciences and Humanities and in The Central and Eastern European Online Library Information of submitting and reviewing papers is available on the Publishing House s website All rights reserved. No part of this book may be reproduced in any form or in any means without the prior written permission of the Publisher Copyright Wrocław University of Economics Wrocław 2011 ISSN (Economics) ISSN (Research Papers of Wrocław University of Economics) The original version: printed Printing: Printing House TOTEM Print run: 200 copies

3 Contents Introduction... 9 Bogusław Fiedor: Microeconomic and institutional forms and methods of integrated smart-growth influence of state on the economy under transformation. An attempt at the identification and classification of major instrument groups Stanisław Kiełczewski: Let s dust off development tracks for Europe: democracy and civilisation Algirdas Miškinis: Doha Development Agenda and the interests of CEE countries Jolanta Drozdz, Algirdas Miškinis: Benefits and threats of free trade Ewa Miklaszewska: The consequences of the post-crisis regulatory architecture for the banks in Central Eastern Europe Wiktor Szydło: Lessons of the Great Recession for the global economy and CEE countries Jerzy Stelmach: The financial crisis and DSGE models. A critical evaluation Radosław Kurach: Stock market integration in Central and Eastern Europe. 78 Oscar Bajo-Rubio, Ramón María-Dolores: Exchange rate pass-through in the New Member States of the European Union. Some explanatory factors Katarzyna Cegiełka, Piotr Dniestrzański, Janusz Łyko, Andrzej Misztal: Degressive proportionality in the context of the composition of the European Parliament György Attila, György Adina Cristina: Principal agent relations in EU budget resource collecting Vaclovas Lakis, Živilė Simonaitytė: The European Union structural assistance audit planning Andrzej Czyżewski, Agnieszka Poczta-Wajda, Agnieszka Sapa: Financial transfers between Poland and the European Union within Common Agricultural Policy against the background of the New Member States experiences after Anna Fabisiak, Walenty Poczta: The allocation of resources from the financial perspective for the agricultural sector in countries of Central and Eastern Europe in

4 6 Contents Katarzyna Kita, Walenty Poczta, Anna Ziemińska: Changes in the level and structure of the agricultural sector s income in CEE countries as a result of the integration with the European Union Ewa Kiryluk-Dryjska: The allocation of Polish Rural Development Program funds. The Optimization Approach Wawrzyniec Czubak: Internal factors affecting the absorption of the European Union structural funds in Polish agriculture Anna Bebel: Family policy with respect to large families in Visegrad countries Monika Bekas: Receivables portfolio of Polish companies Jiří Souček, Dana Kubičkovà: Management of receivables in Czech companies Jonas Mackevičius, Rasa Subaciene, Daiva Raziūnienė: The recommendation for the internal audit in the Lithuanian investment sector Jonas Mackevičius, Erika Ragauskiene: Anatomy of frauds. Types, conditions, prevention measures Krzysztof Biernacki: Exemption of financial services in Value Added Tax Maria Piotrowska: Polarization versus job-skill mismatch. The evidence from the relative income distribution of workers in Poland in Karel Havlicek, Radim Valenčík: A game-theory-based analysis of corruption and its effects in CEE countries Lina Novickytė, Meilutė Jasienė: Banking consolidation. Challenges and prospects Birutė Galinienė, Junona Bumelytė, Ramūnas Markauskas: Economic and financial impact of large scale energy efficiency programme for housing using the European Union structural funds. The case of Lithuania Edgars Kasalis, Ivars Kassalis: Clustering in the Freeport of Riga Dorota Wyszkowska: Poland against the background of Central and Eastern Europe. The statistical portrait of the region Ewa Poprawska, Anna Jędrzychowska: Business cycles in the motor insurance in Poland Izabela Łucjan: Labour market institutions as the instruments of the influence on market mechanisms Karolina Górnik: Polish market of private banking. General characteristics and development trends Ewa Stańczyk-Hugiet, Sylwia Stańczyk: Leadership in the context of the management process in Eastern Europe: Lithuania and Poland cases. A comparative study

5 Contents 7 Streszczenia Bogusław Fiedor: Mikroekonomiczne i instytucjonalne metody prowzrostowego oddziaływania państwa na gospodarkę w okresie transformacji. Próba identyfikacji i klasyfikacji głównych grup interesów Stanisław Kiełczewski: Odświeżmy tropy rozwojowe Europy: demokrację i cywilizację Algirdas Miškinis: Program rozwoju z Doha a interesy krajów Europy Środkowo-Wschodniej Jolanta Drozdz, Algirdas Miškinis: Wolny handel. Koszty i korzyści Ewa Miklaszewska: Skutki pokryzysowej architektury regulacyjnej dla banków z krajów Europy Środkowo-Wschodniej Wiktor Szydło: Lekcje Wielkiej Recesji dla gospodarki światowej i krajów Europy Środkowo-Wschodniej Jerzy Stelmach: Kryzys finansowy a modele DSGE. Krytyczna ocena Radosław Kurach: Integracja rynku akcji w Europie Środkowo-Wschodniej. 87 Oscar Bajo-Rubio, Ramón María-Dolores: Kurs walutowy a inflacja w krajach Europy Środkowo-Wschodniej. Analiza empiryczna Katarzyna Cegiełka, Piotr Dniestrzański, Janusz Łyko, Andrzej Misztal: Degresywna proporcjonalność w kontekście składu Parlamentu Europejskiego György Attila, György Adina Cristina: Relacje agent pryncypał w procesie gromadzenia unijnych środków budżetowych Vaclovas Lakis, Živilė Simonaitytė: Planowanie audytu pomocy strukturalnej Unii Europejskiej Andrzej Czyżewski, Agnieszka Poczta-Wajda, Agnieszka Sapa: Transfery finansowe między Polską a Unią Europejską w ramach Wspólnej Polityki Rolnej na tle nowych krajów członkowskich po roku Anna Fabisiak, Walenty Poczta: Rozdysponowanie środków z perspektywy finansowej, przeznaczonych dla sektora rolnego w krajach Europy Środkowej i Wschodniej na lata Katarzyna Kita, Walenty Poczta, Anna Ziemińska: Zmiany poziomu i struktury dochodów sektora rolnego w krajach Europy Środkowo- -Wschodniej w wyniku integracji z Unią Europejską Ewa Kiryluk-Dryjska: Alokacja funduszy polskiego Programu Rozwoju Obszarów Wiejskich. Podejście optymalizacyjne Wawrzyniec Czubak: Wewnętrzne czynniki wpływające na absorpcję funduszy strukturalnych Unii Europejskiej w polskim rolnictwie Anna Bebel: Polityka rodzinna względem rodzin wielodzietnych w krajach Grupy Wyszehradzkiej Monika Bekas: Portfel należności polskich przedsiębiorstw

6 8 Contents Jiří Souček, Dana Kubíčková Zarządzanie należnościami w firmach czeskich Jonas Mackevičius, Rasa Subaciene, Daiva Raziūnienė: Zalecenia dla audytu wewnętrznego w litewskim sektorze inwestycyjnym Jonas Mackevičius, Erika Ragauskiene: Anatomia oszustw. Rodzaje, uwarunkowania, środki zapobiegawcze Krzysztof Biernacki: Zwolnienie usług finansowych w podatku vat Maria Piotrowska: Polaryzacja a niedopasowanie kwalifikacji. Wyniki na podstawie względnego rozkładu dochodów pracowników w Polsce w okresie Karel Havlicek, Radim Valenčík: Konsekwencje korupcji w krajach Europy Środkowo-Wschodniej z punktu widzenia teorii gier Lina Novickytė, Meilutė Jasienė: Konsolidacja systemu bankowego. Wyzwania i perspektywy Birutė Galinienė, Junona Bumelytė, Ramūnas Markauskas: Skutki finansowe i ekonomiczne programu wspierania energetycznej efektywności skali w mieszkalnictwie przy użyciu funduszy strukturalnych. Przypadek Litwy Edgars Kasalis, Ivars Kassalis: Klastry gospodarcze na przykładzie portu morskiego w Rydze Dorota Wyszkowska: Polska na tle Europy Środkowej i Wschodniej. Portret statystyczny regionu Ewa Poprawska, Anna Jędrzychowska: Cykle koniunkturalne na polskim rynku ubezpieczeń komunikacyjnych Izabela Łucjan: Instytucje rynku pracy jako instrumenty oddziaływania na mechanizmy rynkowe Karolina Górnik: Polski rynek private banking. Ogólna charakterystyka i tendencje rozwoju Ewa Stańczyk-Hugiet, Sylwia Stańczyk: Przywództwo w kontekście procesu zarządzania w Europie Wschodniej: przypadek Litwy i Polski. Analiza porównawcza

7 EKONOMIA ECONOMICS 2(14) ISSN Ewa Poprawska, Anna Jędrzychowska Wrocław University of Economics Business cycles in the motor insurance in Poland Summary: The aim of this paper is to analyze the changes in the motor insurance market in Poland through the analysis of business cycles that have occurred in this area and the comparison of changes in EU countries. Such studies give an opportunity to explore the current insurance market trends and predict future behavior and have also practical significance as they provide the possibility of preparing for cyclical changes. In Poland, the indicator of cyclical fluctuations in the insurance area is the synthetic indicator PIKU (Poznański Indeks Koniunktury Ubezpieczeniowej, in English: Poznań Insurance Business Index). Other measures which are worth examining are claims ratio and combined ratio they will be also analyzed and compared with similar ratios in EU countries. Keywords: motor insurance, business cycles, PIKU, claims ratio. 1. Underwriting cycles mechanism and main reasons Underwriting cycle is characteristic for non-life insurance market, it involves alternating phases of the occurrence of the high and low price of insurance (the so-called hard market phase and soft market phase ) and claims ratios and the rates of return on insurance activity. In the soft period in the cycle, premiums are low, capital base is high, and the competition on the insurance market is high. Due to continuing competition (and other reasons described later), premiums continue to fall (as naive insurers offer cover at unrealistic rates) and insurance companies are forced to compete or risk losing business in the long term. The next stage of the cycle is caused by a catastrophe or similar significant loss (or when claim ratios are at very high level). After major claims, insurance companies stay with less capital, sometimes after extreme events less stable companies are driven out of the market, which decreases competition. As a result of this situation, premiums rise rapidly, the market hardens, and also underwriting procedures are more strict (the hard period in the cycle). After some time, the lack of competition and high rates looks suddenly very profitable, and more companies join the market, that is why business begin to lower rates to compete and underwriting cycle begins again. There are many factors that can influence that cycles, among the most important there are [Meier 2003]:

8 282 Ewa Poprawska, Anna Jędrzychowska 1. Disequilibrium between supply and demand, which results from competitiondriven prices and capacity constrains insurers engage into price competition to gain market share, it make prices low and some time later the level of capital is too low to cover capital requirements and, because of the lack of additional capital sources or high costs of raising new capital, prices have to grow. 2. External shocks such as interest rates (in most of the models premiums are the outcome of discounted future losses, so unexpected changes in the interest rates would cause changes in premiums and cause underwriting cycle); regulatory and accounting lags such as data collection lags, regulatory lags, and accounting rules (sudden important changes can be a reason for additional costs, higher solvency requirements or cause a need of rising reserves); and catastrophic losses this is one of the most important reasons for underwriting cycle. A shock to capital (unexpected claim payments on existing policies) would reduce insurers capital. If capital cannot be raised or cost of capital is high, insurers have to increase the probability of insolvency, reduce the amount of coverage at a given price, or rise the prices. 3. General business influence such as general business cycle insurance business is linked to the general economic situation and business practices. Greater risk management practices would be expected to reduce the effects of shocks and the shifts in demand and supply that may cause variability in the underwriting results. The possible evolution of the regulatory environment at national or international (global) level has also an impact on business, capital requirements, and pricing policies. 2. Measures of insurance business activity There are many measures of insurance market situation, some of them are based on quantitative methods, other no qualitative methods (some of them are mixed). One of the oldest is PIKU (Poznański Indeks Koniunktury Ubezpieczeniowej, in English: Poznań Insurance Business Index) constructed by the Department of Marketing Research at the University of Economics in Poznań. Research is done quarterly since the second quarter of PIKU gives the synthetic assessment of the economic situation in the sector of insurance. Studies of the insurance market tendency have been also done by Pentor Research International since The tests are implemented quarterly using the method of telephone interview [PIU/Pentor 1999]. Since 2003 Central Statistical Office (GUS) has also done surveys among the companies providing services to financial intermediation (section J of the Polish Classification of Activities) [Zagoździńska 2006] PIKU index The method of calculation of PIKU index is based questionnaire conducted quarterly by post among the general managers representing individuals tested [Mocek 2009].

9 Business cycles in the motor insurance in Poland 283 It includes specific questions to which respondents provide five options for answers (strong decrease, small decrease, no change, slight growth, strong growth or the significant worsening, slight worsening, unchanged, slight improvement, a significant improvement). Then the system of weights based on the size of the market share and the size of capital an insurance company is introducted. Further, simple indicators are calculated on various economic categories and the types of insurance services, according to the following formula: SK = k k k k k 100 w 50 w + 0 w + 50 w w i1 i2 i3 i4 i5 i= 1 i= 1 i= 1 i= 1 i= 1 k 5 i= 1 j= 1 where: w i1 weighted responses indicating strong decrease / major worsening ; w i2 weighted responses indicating slight decrease / minor worsening ; w i3 weighted responses indicating no change ; w i4 weighted responses indicating slight increase / slight improvement ; w i5 weighted responses indicating strong growth / much improved. And finally PIKU is a weighted average of the set of selected balances of individual economic situation (diagnostic and prognostic) and has a value between 100 (strong deterioration, decline) to +100 (strong improvement, growth). PIKU is calculated using the following formula: w ij PIKU UOWUO = + UOWS UOWO UOLR + UOSF + UPKLN 10 + UPLUO + UPWS UPSZ + UPSF where:uowuo balance of the assessment of the volume of services in quarter t; UOWS balance of the assessment of the volume of wtitten premiums in quarter t; UOWO balance of the assessment of the volume of compensations paid in quarter t; UOLR balance of the assessment of the number of customers giving up their insurance contracts in quarter t; UOSF balance of the assessment of the overall financial position of insurance companies in quarter t; UPKLN the balance of the forecast of the number of new customers in quarter t +1; UPLUO the balance of the forecast of the number of insurance set in quarter t +1; UPWS the balance of the forecast of the volume of wtitten premiums in quarter t +1;

10 284 Ewa Poprawska, Anna Jędrzychowska UPSZ the balance of the forecast of the claims ratio in quarter t +1; UPSF the balance of the forecast of the overall financial position of insurance companies in quarter t +1. It is determined for the entire insurance market as well as separately for the insurance of life and property insurance for groups classified by size (large, medium, and small), and for the criterion set by the five chosen regions Other measures Other measures that can be used to analyse underwriting cycle are financial ratios such as: claims ratio (compensations paid, plus a change in the level of technical provisions divided by premiums), combined ratio (claims ratio with technical costs), return on sales, return on equity, cost ratios (for example administrative and acquisition costs), the dynamics of gross written premiums, the number of policies, claims, and many others. In analysing general insurers activity, all of them can be taken into consideration, while in analysing only the separated group of insurance, not all of the ratios are possible to calculate because of the lack of data (not all of the data are published). 3. Situation on the Polish market Values of PIKU index since 1999 till 2008 are presented in Figure 1 (line for total value, dark grey bars for big insurers, light grey for small companies). Fig. 1. Values of PIKU index from 1999 to 2008 Source: [Mocek 2009].

11 Business cycles in the motor insurance in Poland 285 According to PIKU data, it can be said that the underwriting cycle takes place on the Polish insurance market and that this cycle is quite long around 8-10 years. In 2001 and 2002 pure values of PIKU index can be compared with pure values of GDP dynamics in that period (around 1% comparing to for example 2006 with 6%). It is worth comparing these results with other measures, for example claims ratios, ROS, and costs ratios (see Figure 2). Fig. 2. Claims ratios, acquisition and administrative costs ratio, and ROS for the Polish insurance market in Source: authors own study based on the data from Polish Supervisory Authority. Trends in claims ratios for the whole market suggest that the reaction of the financial results is delayed around 1 year comparing to PIKU index, but ROS ratio has a very similar course. The analyses done for the whole market are difficult to interpret, as there are many factors that can have influence on the financial results in this area it is worth analysing the motor insurance market separately. 4. Situation on the motor insurance market in Poland As for motor insurance in Poland, the amount of both premiums and compensations paid were growing steadily in ; the rate of this increase grew in mostly in MTPL insurance. The growth in premiums written from the MTPL is comparable to the increase in the number of registered vehicles (in 2002 it was and in 2008, over ), because it is a compulsory insurance. The increase in the size of compensation payments associated with the increased awareness of victims in relation to their rightful compensation. This involves the development of companies offering legal assistance in obtaining compensation and benefits for people injured in traffic accidents.

12 286 Ewa Poprawska, Anna Jędrzychowska Fig. 3. Gross written premium (GWP) and claims incurred (million PLN) from MTPL and casco insurance in Poland in Source: authors own study according to Polish Supervisory Authority, data available at gov.pl. Fig. 4. The dynamics of gross written premiums and claims incurred from MTPL and auto casco insurance in Poland in Source: authors own study, according to Polish Supervisory Authority data. It is also worth glancing at the dynamics of premiums and claims in MTPL and casco insurance. In Figure 4, the dynamics of gross written premiums and claims

13 Business cycles in the motor insurance in Poland 287 incurred are shown. It is very difficult to find any cycle in these data. Perhaps the main reasons for the changes in the insurance market in Poland are not recurring but new phenomena, which just begin the cycle. Moreover, it is assumed that the insurance market has been developing in Poland since 2003 since the introduction of new laws and regulations that govern it. It is also important to analyse the technical and financial results of the insurers and claims ratio, ROS, and the ratios of the level of acquisition costs and administrative costs. Claims ratios in Poland were constantly decreasing until 2008 in MTPL and casco insurance similar trend can be observed in EU countries. Fig. 5. Claim ratio (left axis) and ROS ratio (right axis) for MPTL and casco insurance in Poland and claims ratio in motor insurance in the EU in Source: authors own study based on CEA data Polish Supervisory Authority, Generally claims ratios are high in motor insurance, around 80%. In Poland since 2004 claims ratios have been at the level similar to EU countries. On the other hand, it is also important to analyse the technical results of this activity. In motor insurance in Poland, the results are very poor there were only 3-4 years with positive ROS ratios. In casco insurance, tendencies from 2004 to 2008 were positive, only in 2009 with negative values (it is a result of a sudden drop in the prices of spare parts and man-hours). In MTPL insurance, a negative trend has started in It can have two main reasons: significant changes in legal regulations and the level and trends in administrative and acquisition costs. Regulations may affect the whole insurance market (for example, the Act of 2003, which adjusted the Polish insurance law to EU requirements), but also the selected area of insurance. An example of rules which have a strong impact on the motor insurance in Poland was introduced in August 2007 (and valid until the end of

14 288 Ewa Poprawska, Anna Jędrzychowska 2008) so-called Religa s tax 1. It was a legal regulation, which required insurance companies to transmit 12% of the liability insurance premium for the National Health Fund. This was to be involved in treating victims of traffic accidents. This resulted in insurance premium in 2008 compared to 2007 at more than 6% and poore insurer s results. Another important change was the amendment to the Civil Code in 2008, which introduced the right of claiming compensation for pain and suffering by the deceased victim s relatives. The amounts of this part of compensations are increasingly higher. It should be emphasized that such changes do not only intervene in the activities of insurers, but also violate their business cycles. Another important factor is strong competition among the market intermediaries who sell policies at a cost that is as low as in the case of policies sold through the network of banks bancassurance. Because of strong competition, insurers spend more funds on acquisition and, at the same time, due to IT systems development and using direct distribution channels, administrative cost has been reduced (premium income from direct channel was equal to 350 million PLN in 2007, while in 2006 to 185 mln PLN; it is estimated that in over four years, direct channel should generate approximately 10-15% of premiums written; see Figure 6). Fig. 6. Acquisition and administrative costs ratio in motor insurance in Poland in Source: authors own study, according to Polish Supervisory Authority, data available at gov.pl. time. 1 Prof. Zbigniew Religa, a prominent cardiologist, was the Minister of Health in Poland at that

15 Business cycles in the motor insurance in Poland Summary From the presented data, it does not appear directly that motor insurance in Poland was subject to business cycles. The reasons for this can be ascribed to the following facts: the Polish insurance market is still young; Polish accession to the EU and the introduction of EU regulations in the area of insurance could affect the natural cycles of the Polish insurance market; the area of motor insurance in Poland is still dominated by four leading insurance companies, in 2009 six insurers (out of 23 operating in the area) gathered 82% of the total premium in that year for motor insurance, (PZU SA the largest insurance company, 46% of total premium); changes associated with the prolonged period of liability from the MTPL insurance to 20 years also had an impact, especially on the profitability of these insurance. It should also be noted that in the area of insurance, including motor insurance, we can expect business cycles in the long term more than 10-year cycles. For the study of cyclical phenomena on the insurance market, PIKU index is a valuable tool for monitoring the current situation. However, in the research on the area of motor insurance, there is a need for modifying this general tool with respect to the elements associated with claims ratios in order to apply it also to the area of motor insurance in Poland in particular, MTPL and motor vehicle owner s auto insurance casco. Literature European insurance and reinsurance federation (CEA), data available at Meier U.B., Outreville J.F., The Reinsurance Price and the Insurance Cycle, paper presented at the 30th Seminar of the European Group of Risk and Insurance Economists (EGRIE) Zurich, September Mocek M., Wahania koniunktury na polskim rynku ubezpieczeniowym w 2008 roku w świetle wyników testu koniunktury, Wiadomości Ubezpieczeniowe 2009, nr 2. PIU/Pentor, Monitoring Ubezpieczeniowy 1999, nr 1, pp Polish Supervisory Authority, data available at Zagoździńska I., Koniunktura w wybranych jednostkach sektora finansowego i czynniki ją kształtujące, [in:] Diagnozowanie i prognozowanie koniunktury gospodarczej w Polsce, ed. M. Mocek, AE w Poznaniu, Poznań 2006.

16 290 Ewa Poprawska, Anna Jędrzychowska Cykle koniunkturalne na polskim rynku ubezpieczeń komunikacyjnych Streszczenie: Celem referatu jest próba prześledzenia zmian na rynku ubezpieczeń komunikacyjnych w Polsce poprzez analizę cykli koniunkturalnych oraz porównanie sytuacji w krajach UE. Analiza wahań koniunktury ma istotne znaczenie poznawcze, gdyż daje możliwość zbadania właściwości obecnych tendencji na rynku ubezpieczeń i prognozowania zachowań przyszłych. Badania mają też znaczenie praktyczne, gdyż dają możliwość zakładom ubezpieczeń przygotowania się do zmian koniunkturalnych. W Polsce jednym z mierników wahań koniunkturalnych w obszarze ubezpieczeń jest PIKU (Poznański Indeks Koniunktury Ubezpieczeniowej). Innymi miernikami wartymi analizy są wskaźniki szkodowości, wskaźnik łączony, ROS, wskaźniki poziomu kosztów. Wskaźniki te również poddane zostały analizie.