Consumer lending boosts insurance market

The credit and guarantee insurance market reached 27 million euros at the end of 2003, twice higher than in the previous year. The consumer lending boom in 2003 also showed in the full-year results of the insurers. If compared with 2001, these types of insurance increased 2.25 times in terms of value. The total loans granted by credit institutions to individuals rose 260%. Loans taken out by individuals were worth nearly 2bn euros at the end of 2003, compared with 660 million euros in December 2002. Insurance companies make money off the increase in lending through two types of insurance. One is the credit and guarantee insurance policy, through which insurance companies underwrite the risk of bank clients defaulting on their loans in exchange for a premium paid by the banks. The other type of insurance that saw significant growth was the life insurance sector, as banks made it a mandatory requirement for any housing loan applicant. ZF