Insurance market up 19% but still room for growth

At the level of gross cashed in premiums, the insurance market rose by 19% in the first half of this year, to 396 million euros ($485 million). The growth pace indicates the possibility that the insurance industry might this year move towards one billion dollars (800-820 million euros), making insurance one of the most important sectors of the Romanian economy.

“Gross premiums collected during the first six months of this year amounted to 16,072 billion ROL, according to estimates based on reports submitted to the Insurance Surveillance Fund (where companies pay a share of premiums each month). By comparison the figure for the same period last year stood at 12,184 billion ROL,” said Mirela Antohi, dealing with press relations at the Insurance Surveillance Commission (CSA).

“The 19% increase registered in the first half of this year is a normal one, in the context where car insurance continues to hold a high percentage within insurers’ portfolios. I think the same pace will be maintained until the end of this year because I cannot foresee any conditions favouring a spectacular evolution of other business sectors,” explained Cristian Constantinescu, general manager of Allianz-Tiriac.

The growth engines for this market continue to be leasing, car insurance and insurance related to credits, but the growth rate is slower as compared to previous years.

“Consumer credits have been more tempered due to National Bank and CSA regulations. Lending aimed at natural persons has subsided, but we are expecting a rally during the second half of this year,” said Mugurel Ceraceanu, Asiban general manager.

The company derived 21.2 million euros from gross premiums underwritten in the first half, 39% higher in euros, and double the increase on the rest of the market, but the growth pace was much slower as compared to the previous year. Gross premiums underwritten are premiums to be paid in the account of an insurance policy, which can be spread out over the insurance year, while cashed-in premiums only indicate the sums already paid in the account of the insurance policy.

“It is difficult to continue growing after the company’s business has tripled. The market has a high potential, however, because if we look around, the proportion of the insurance industry in comparison to the Gross Domestic Product is merely half or even less than the figure seen in the rest of Europe,” Ceraceanu also said.

Almost all major companies on the Romanian market posted a faster rate of growth in euros as compared to that of the market in general, with the exception of Asirom, Generali and AIG Romania. Asirom explained that its slower growth pace is due to the fact that subscribed premiums in the first six months did not include H2 car civil liability insurance.
sorin.pislaru@zf.ro