Soaring construction costs and new technologies hiking insurance prices in Estonia
In recent years, the cost of both construction and renovation work has risen significantly, as have the costs of replacing home furnishings and appliances, leading to higher property insurance premiums.
Private individuals paid €115 million in property insurance premiums in 2025, while insurers paid out €60 million in claims.
According to Julius Pau, head of actuarial and pricing at If Kindlustus, property insurance prices for private customers have remained relatively stable over the past year but continue to trend upward.
"The overall direction has been one of moderate price increases, with the primary goal of keeping insurance coverage in line with inflation and rising reconstruction and repair costs," Pau said.
According to Pau, property insurance prices are mainly influenced by the cost of construction and renovation work, building material prices and labor costs.
"As these costs have not declined in recent years, insurance premiums have also generally moved moderately upward," Pau acknowledged.
According to Andres Piirsalu, a member of the management board of the Estonian Insurance Association, premiums may increase, for example, if a property's replacement value has risen due to inflation or if a customer chooses broader coverage than before.
"In recent years, the cost of both construction and renovation work has risen significantly, as have the costs of replacing home furnishings and appliances, which means insured amounts need to be reviewed from time to time to ensure they reflect actual costs," Piirsalu said.
Pau said a similar trend also applies to commercial property insurance.
"Although there, price changes depend more on the specific nature, size and risk profile of the property," Pau added.
According to Piirsalu, insurance premiums are also affected by broader market developments. If there are more claims or if settling claims becomes more expensive, this will eventually affect the entire insurance market.
"In home insurance, costs are influenced by storms, floods, fires and rising construction and labor costs. New technologies have also introduced new risks, such as damage related to solar panels and battery systems," Piirsalu said.
Piirsalu noted that a change in insurance premiums does not necessarily reflect a price increase in insurance services.
"Often, it instead means broader insurance coverage, more up-to-date insured amounts and better protection for situations when help is genuinely needed," Piirsalu added.
According to Indrek Petter, head of Seesam Kindlustus' insurance department, there have been no major price changes at Seesam this year. In the corporate segment, Estonia's insurance market contracted by nearly 2 percentage points during the first four months of the year.
"Overall contract prices remain broadly at last year's level, although changes may be influenced by the scope of the desired insurance coverage, coverage limits or other risk factors affecting pricing," Petter said.
According to Petter, consumers should not compare policies based solely on price but should also review the content of the coverage.
"The cheapest solution may not always provide sufficient protection when it is needed most," Petter said.
According to the 2025 insurance market review, insurers collected €680.8 million in premiums in 2025.
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Editor: Jete Mäggi, Marcus Turovski
