The stormy years following introduction of the single market appear to be over at last. In spite of the fact that the premium level in the main segments was cut for good, insurers were for the first time able to impose substantial increases in premium rates in 2001, a development which is reflected in the consumer price index. Premium revenues were also augmented by a greater number of insured risks. The need for Austrian insurers to correct their price policy was driven chiefly by the negative actuarial results of the property and liability insurance. More than a third of the insurers in this business were unable to compensate losses from the actual insurance business by income from investment. Echoing the overall economic development, income from premiums on life insurance also showed stunted growth in 2001. The only volume to develop with genuine dynamism was that of annuity insurance premiums (+42.8 percent). Payouts from life insurance rose dramatically in 2001, as a consequence of the 1996 tax reform which produced a surge in advanced insurance contracts. Those contracts are now beginning to mature. Demand for supplementary health insurance coverage has been declining for years, but insurers could still boost revenues by increasing premium payments. Expenditure on claims was affected by an increase of almost 3 percent in the number of claims incurred. After the disasters of 2000, the number of claims incurred levelled off throughout the property liability insurance sector. Developments in both revenues and expenditures markedly moderated the claims ratio for the entire business segment. In 2001, private insurers recorded the lowest growth rate of provisions during the past decade. The lower growth rate in actuarial reserves for life insurance was not fully compensated by the upswing in the two other segments. With regard to the portfolio structure, the shift from loans to mutual funds continues; cash holdings expanded considerably in 2001. The return on investment dipped slightly, so that the gap to the yield on federal bonds narrowed to some 1.5 percentage points.
