Competition for attracting workers is growing ever fiercer in the Latvian labour market, and alongside other benefits, companies and organisations are also offering their employees life insurance. Between 2021 and 2025, the volume of premiums paid by legal entities for life insurance without a savings component has doubled.
The demographic decline in Latvia has already been under way for several decades, with both the total population and the share of people of working age falling. According to the latest report by the think tank “LaSER”, “Latvia 2040: Demographic Reality and Future Scenarios”, the number of working-age residents in Latgale could fall by 35% by 2040, while in the other regions, apart from Pierīga, the drop could be between 17% and 28%1. Recruiting staff is also difficult because unemployment is comparatively low, living standards are gradually rising, and employees' expectations are increasing too, both regarding pay and the working environment as a whole.
“Last year, too, almost 10% fewer children were born than the year before, which shows that the negative trend is continuing. This is pushing employers to look for ever new ways to retain employees or attract new ones. In addition to pay rises, extra days off, remote work and health insurance, more and more organisations are also taking an interest in the option of insuring their employees' lives,” says Jānis Abāšins, head of the Latvian Insurers Association.
While in 2021 the volume of insurance premiums paid in by legal entities was 355 thousand euros, in 2025 it was 747 thousand euros, an increase of more than twofold. The number of insured persons has grown comparatively little over this period, which indicates that better policies with ever broader cover are being bought and that employees are being insured for higher sums.
Employees appreciate it
Data from a population survey show that 74% of residents would regard the purchase of life insurance by their employer as a significant benefit. It would be valued particularly highly by residents with two or more children (87%), unskilled workers (86%), young employees in the 18 to 24 age group (82%), skilled workers (81%) and women (77%). Only one in ten respondents (10%) would not appreciate such an employer benefit, while 14% have no opinion2.
“Life insurance can be a very significant benefit, especially if the employee is the household's main breadwinner and the family includes underage children or elderly relatives who need care, because the loss of income can seriously affect a family's everyday life and its future. Life insurance is likewise important if a person has credit obligations that would be hard for their loved ones to cover — for example, a mortgage or a consumer loan,” J. Abāšins points out. Insurance can also be important for workers who carry out high-risk work on a daily basis, for example in construction, the chemical industry or elsewhere.
J. Abāšins stresses that life insurance is one way in which, amid strong competition, employers can attract new employees or retain existing ones, because it is not always the level of pay alone that is decisive, but also the care shown for the wellbeing of the employee and their family members.
“An employer's contributions towards an employee's life insurance without a savings component are not subject to tax if they do not exceed 10% of the employee's annual gross salary and no more than 750 euros a year,” J. Abāšins points out.