Warta bets on discipline over growth as insurance price war intensifies

Jarosław Parkot, CEO of Warta, warns the insurance industry against a price war in MTPL (compulsory motor third-party liability insurance) and comprehensive motor insurance (AC), which could result in losses running into billions. The insurer has already raised prices this year, and further increases may still follow. The 16-year veteran CEO predicts that within five years Warta will overtake PZU.

Piotr Sobolewski: Gross written premiums amounted to PLN 12.6 billion (approx. EUR 2.9 billion) in 2024 and PLN 15 billion (approx. EUR 3.5 billion) in 2025. To maintain that growth momentum in 2026, the figure would need to reach PLN 18 billion (approx. EUR 4.2 billion). Is that achievable?

Jarosław Parkot, CEO of Warta: This year will be different. A simple continuation of growth under current conditions would be unwise. We are dealing with a “soft market” in property insurance and an intense price war in motor insurance, where the industry is posting losses.

In such an environment, chasing market share at any cost would be a mistake. That is why we have decided not to accelerate further for now. As early as April, as one of the first major players, we decided to raise prices by 8%, accepting the resulting temporary slowdown in sales. Thanks to this, despite losses across the market, we are maintaining a positive result in this key segment.

Further premium increases depend on average claims in MTPL

Is this the end of price hikes or just the first stage?

It is the first stage. We are already looking ahead to next year, as in the insurance industry financial results are planned well in advance. 2026 is already largely modelled by us. We have estimated this year’s performance and our profitability.

Insurance is a long-term game. A policy purchased today will protect the client for the entire coming year, and any claims arising from it may be settled even later. That is why our current pricing decisions shape the financial results we will see in the future. We maintain profitability and our goal is to continue this strategy. Therefore, we closely monitor key indicators such as average premium, claim frequency, and rising vehicle repair costs. These will determine what level of pricing will be sufficient to deliver next year’s plan, and whether further adjustments will be necessary.

Is this year already written off as a loss?

Absolutely not. We hold a 20% market share and are growing faster than the market. We are currently experiencing a temporary cooling of sales, as we are making decisions whose effects will be visible next year. It is not about whether we end up in profit or loss, but about executing the plan.

What is the plan?

Highly ambitious, both in terms of written premiums and financial performance. We have solid foundations for this – we are not only a major player in Poland, but also a key part of the international Talanx Group [Warta’s shareholder – ed.], for which we generate over EUR 300 million in profit annually. However, we are currently seeing falling prices not only in MTPL, but also in corporate, property, and life insurance. This means that not every year will be a record year for us, but we are taking action to meet our targets.

“The era of strong results is coming to an end; action is needed”

Why has the underwriting result in MTPL insurance for the sector fallen back into negative territory? Has the market returned to a price war, or have claim costs accelerated?

Both. Over the past five years, MTPL premiums in the market have increased by 11%, and in comprehensive motor insurance (AC) by 32%, while claims costs have risen by 50%. If such a disparity exists, an enormous gap emerges. If we add similar gaps in property and corporate insurance, it is high time to consider where the market is heading. The era of strong results is coming to an end; action is needed. We are taking it, because a sound business model is what matters most to us.

Should the entire market follow your lead?

Every company in the market makes its own sovereign decisions. However, I feel it is my duty, as the CEO of a market leader, to speak openly about facts and figures. I want the discussion about the state of the market to be based on hard data, not wishes or assumptions. You know well that I rarely give interviews, but we are at a moment when I should send this signal.

Warta CEO forecasts major losses for the sector

Let us outline the worst-case scenario. What could happen?

Our market analyses, based on two plausible scenarios of rising average claim costs – by 5% and 7.5% annually – paint a very concerning picture for the entire industry.

Let us start with compulsory MTPL insurance. Under these assumptions, we forecast a market-wide loss of between PLN 1.3 billion and PLN 1.6 billion (approx. EUR 0.30–0.37 billion) in 2026, which would deepen in 2027 to between PLN 2.2 billion and PLN 2.8 billion (approx. EUR 0.51–0.65 billion).

That is not all. Additional substantial losses would emerge in the comprehensive motor insurance (AC) segment. Already in the first quarter, the AC market is in the red, and history shows this is usually the strongest period of the year. By the end of 2026, losses in this segment are expected to reach between PLN 26 million and PLN 179 million (approx. EUR 6–42 million), rising in 2027 to between PLN 380 million and as much as PLN 840 million (approx. EUR 88–195 million).

Does this scenario have to materialize? It depends on the responsibility of all market participants. We want to stress that Warta is not participating in this. Our fundamental principle remains unchanged: every product must be profitable. We will remain profitable.

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“We are not fighting for short-term profits”

But could this cost you the leadership position in MTPL, which you have been pursuing so actively?

Even if we were to hold second place for three or four months, what difference would that make? We are not fighting for short-term profits. Our ambitions are very serious, but growth must be rational. In the long term, pricing changes can only strengthen our position.

We are a leader in every category of the market. We have the best pricing, the best risk selection, the best relationships with agents and brokers, and the highest quality – and we are also the best employer in Poland.

We implement 100 innovations every year and invest heavily in modern processes. At Warta, technology is meant to support customers, agents, brokers, and employees. Thanks to automation, we are able to pay claims even on the same day, and benefits within hours of notification. More importantly, modern tools relieve our experts from bureaucracy. Instead of filling out forms, they can spend their time in direct conversation and supporting the customer in a difficult situation. That is why, at Warta, every claimant is guaranteed contact with a dedicated handler, which is still rare in the market today.

Warta to become Poland’s largest property insurer within five years

The industry may argue that when you were number two and chasing the top position, scale mattered, but now that Warta is the leader, it suddenly no longer does – and you are calling for price increases.

Scale does matter, but in a rational way. We want to remain number one in this market for the next five years. More than that, within five years we will be the number one property insurer in the entire market [which would mean overtaking PZU – ed.]. In all segments? Perhaps not, but in most of them, including comprehensive motor insurance (AC).

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What needs to change in the market? Should prices be increased, or should the KNF (the watchdog – ed.) take stronger action when companies are operating below the line?

The KNF has already started acting; it is conducting inspections and imposing fines for previous years. However, I believe it is also worth looking at what is happening right now. Ultimately, decisions on strategy and risk appetite always rest with the management boards and supervisory boards of individual companies. One thing is certain: the market as a whole has no choice – it must raise prices, otherwise it will sink.

Customers may face a risk of deteriorating quality

Is this the end of the era of saying that MTPL insurance in Poland is not profitable?

That is a meaningless explanation. We have shown that this product can be profitable, and we have been doing so for years.

You are currently earning little – PLN 2 million (approx. EUR 0.46 million) in underwriting profit.

Yes, but that refers to the first quarter of this year, a period marked by falling prices and adverse weather conditions. This year and next, we aim to achieve a combined ratio [claims and costs divided by premiums collected – ed.] of 97–98%, with a target of 94%. That is a healthy margin, while ensuring that customers understand we are not generating excessive profits from this product.

How do you explain this to customers? They will pay more now, even if they have not had any claims. What customer outflow are you expecting?

For years we have had a positive balance. Over the past four to five years, we have gained an additional 3 million customers – a substantial base that gives us strong stability. How do we explain price increases? We need to show customers what the premium is, what inflation is, and what the claims costs are. If it turns out that the sector’s profit and loss accounts are missing PLN 2–4 billion (approx. EUR 0.46–0.92 billion), then customers bear the risk of deteriorating quality. If I were a customer, I would prefer to pay those few dozen złoty more.

But MTPL is not perceived as insurance you buy for yourself – it is treated like a tax.

That is true, but the same applies to AC. Moreover, it is a situation that could affect any of us, where service and quality would be much lower. And for us, quality is key. It is no coincidence that for nine consecutive years we have had the lowest complaint rate reported to the Financial Ombudsman. A company with high quality will cope far better in a difficult situation than one competing purely on price.

The effect of losses in the sector would be… Warta’s growth

Well, quality is one thing, but what else would result from the scenario you have outlined?

Our stronger growth in the future, because we would have a better platform for development.

That sounds like a good outcome. Perhaps there is no need to warn the industry – just focus on your own business?

If we were thinking only about ourselves, we might have stayed silent. But leadership comes with responsibility. It is our duty to care about the stability of the entire sector, because in the long term this is in every customer’s interest. That is why we cannot ignore the facts.

And the facts are that repair and claims costs will continue to rise. To offset this increase, the market needs a price adjustment in the range of 10–15%. I am not saying this to scare anyone. I am saying it because this is what the calculations show. It is pure mathematics, and it is hard to argue with that.

Warta targets no. 3 position in life insurance market

Motor insurance accounts for 63% of your portfolio – quite a large share.

Property and motor insurance are growing at a similar pace. Importantly, in regular-premium life insurance we are also growing twice as fast as the market. We are developing very strongly in life insurance – just a few years ago we were the 10th player, and now we are fourth. Moreover, we do not have single-premium business. Our strategy is focused on risk-based life products. Single-premium policies benefit only the bank or other institution we cooperate with.

We generate over PLN 200 million (approx. EUR 46 million) in new written premiums in regular premiums each year.

Reaching third place in this market is realistic. We have built something unique in the market, because we also sell life insurance through agents specialized in the non-life segment. A few years ago this seemed impossible; today it is part of our offering.

Does adding health insurance as an optional add-on to life policies make a difference in competition?

Absolutely. We see that our customers need such protection and are choosing it. The hard data speaks for itself. In our new sales, the share of policies with health-related supplementary coverage increased by as much as 11% over the past year. This is a clear signal that customers are increasingly seeking comprehensive protection, and health is an absolute priority for them. That is why expanding our offering with further innovative health add-ons is, and will remain, one of Warta’s key development directions.

“We have not found a valuable acquisition target”

Perhaps it would make sense to enter “pure-play” health insurance?

In the current healthcare system, the need for health insurance is obvious, but one must pay attention to profitability, which is low. If we look at the main players, it is worth examining how many years it took them to start making a profit. Today we cooperate with Lux Med and offer health insurance for SMEs. To become a major player, we would have to be the provider of the service itself, and the market would need to be more profitable. Our analyses to date indicate that this is not an attractive area for our development.

Is Talanx open to acquisitions in Poland?

We have grown from a 12% to a 20% market share organically and are presented within the group as a model of growth without acquisitions. But Talanx does make acquisitions abroad. We have had several discussions about potential takeovers in Poland. Our shareholders ask us what we think, and over the past 14 years we have not found a target that would be valuable for us. We do not see a tangible benefit for Warta.

Large discounts are visible in the corporate insurance market

Let’s move to corporate insurance. You have prepared a report showing that the market is shrinking and prices are falling, yet many players still have high ambitions in this segment. How do you explain that?

The large corporate insurance market is challenging, but we have to be present in it. The biggest current challenge is the global market environment and falling prices, also among reinsurers. To illustrate this, no Polish company is able to insure, for example, an entire power plant on its own. Part of this huge risk is transferred to reinsurers, mainly in London. When they reduce their prices, pressure immediately appears in our local market to cut rates for the end customer. And that is exactly what we are observing – prices in Poland are falling, and the discount cycle is reinforcing itself.

This is particularly dangerous because this segment has very low margins. Profitability can only be maintained when the loss ratio is around 53–55%. Meanwhile, we are seeing price cuts in large risks of 30–50%.

But the market is growing…

Investments linked to the National Recovery Plan (KPO) are driving demand. But what does that matter if overall profitability is eroding before our eyes? Today, pricing pressure is visible in almost every area of corporate insurance.

Nuclear insurance pool? Warta may enter directly, but global players are also possible

At the same time, we have major projects such as a nuclear power plant and Port Polska [a major airport and communication hub planned in central Poland – ed.].

As the second-largest player, it is natural that we are involved in these investments. Within the Talanx Group we have a reinsurance company that specializes in this type of project. The key question is how the risk is assessed and what the premium is – if we are able to accept it, then we provide insurance cover for the investment. It is a purely economic decision.

Do you feel any disappointment that concerns the nuclear insurance pool? Warta had considered taking a leadership role. Now we know that TUW PZUW [a mutual insurance company from PZU Group – ed.] will take that position.

We are actively participating in the discussions. We will see what the final outcome is. If the proposal is acceptable to us, we will accept it. We are also talking within the group about entering both as Warta and as a group entity – whether Hannover Re or HDI Global. We are doing this because a nuclear power plant will require enormous capacity.

“Industry cooperation is possible where it does not infringe competition law”

The nuclear insurance pool is one of the areas where the sector cooperates. For years, however, there have been complaints that there could be more such cooperation, and the banking-sector BLIK system [instant payments via telephone – ed.] is often presented as a model to follow. Is there anything that can be done?

The comparison with BLIK is a clever one, but we must remember the fundamental differences between our sectors. The key question is shared benefit. In insurance, cooperation develops where the benefit is clear for all parties and does not infringe competition.

We can point to two main areas here. The first is combating crime and improving operational processes. This is our shared interest. That is why we successfully cooperate within the Insurance Guarantee Fund (UFG) and the Polish Insurance Association (PIU) on projects such as the joint mobile application for handling road incidents mStłuczka, the digital exchange of accident photos (the FOTO system), and databases that help combat fraud attempts. This benefits both us and, above all, honest customers.

The second area is, for example, the creation of market standards. As an industry, we are able to develop common positions and operational standards, as best illustrated by the distribution guidelines worked out with the Polish Financial Supervision Authority (KNF), which aim to improve sales quality. We are also engaged in key regulatory debates, for example on the principles of resolution and forced restructuring. We believe that in this area the KNF should play a central role.

Common definitions? A difficult proposal to implement

All right, but what about another area of cooperation – for example, standardized definitions in general terms and conditions (GT&C) developed by the industry? This has been raised, among others, by the Financial Ombudsman. Is it worth pursuing?

I understand the intention behind this idea – the desire to make it easier for customers to compare offers. And that is an objective I fully agree with. However, I have fundamental doubts as to whether standardizing products is the right way to achieve it.

I am a supporter of free-market competition because it best protects customers’ interests. Competition is not only about price. It is also about innovation, quality of service, claims handling speed, and the scope of coverage. If we reduce everything to a single standard template, the only remaining field of competition will be price. And that leads to lower quality and, ultimately, a loss for the customer.

“Every year we play in the Champions League – and we win it”

Let’s finish with the topic of managing Warta. It will be 16 years in July since you took the helm. Do you still enjoy running such a large company?

A lot is happening at Warta. Every year we play in the Champions League – and we win it: we deliver the best results, the best profitability, and we are the best in claims handling and cooperation with intermediaries. Today, it does not matter how long someone has been in a position, but what results they deliver. That is what we focus on.

You can get tired of that.

On the contrary. I think people do not get tired when they have a lot of work, but when they stare out the window and no longer see meaning in what they do. I love my job, and its key element is people. Working with the team, direct relationships, and jointly overcoming challenges give me the most energy. Being in the office every day is a genuine pleasure for me.

How long is your current term?

My current term lasts another two years. What happens after that? As per the rules, that will be decided by the company’s owners. After 16 years as CEO, looking at the company’s remarkable development, I can honestly say that leading Warta brings me immense satisfaction. The energy I draw from working with people makes it still feel like pure pleasure, not work.

Key Takeaways

1. Response to the price war and sector loss forecast. Warta was one of the first major players to raise policy prices by 8% in April, accepting a temporary cooling of sales in order to protect profitability. Jarosław Parkot warns that, given a lack of market discipline and a 50% increase in claims costs, the combined losses across the sector in motor insurance alone (MTPL and comprehensive motor insurance) could reach billions of złoty in 2026–2027.
2. Ambitious expansion plans. Warta’s strategic goal is to overtake competitors and secure the position of Poland’s largest property and casualty insurer within the next five years, including in the comprehensive motor insurance segment. At the same time, the company is rapidly developing life insurance based on regular premiums, aiming to move from fourth to third place in the market.
3. Skepticism toward acquisitions and standardization. Talanx, Warta’s parent company, remains open to acquisitions in Poland; however, the management has not identified any target over the past 14 years that would deliver tangible business value. The CEO of Warta is also critical of proposals to standardize definitions in insurance contracts, arguing that limiting competition to price alone would undermine service quality for customers.