Insurers expect two-digit decline and possibly bankruptcies

The general insurance segment is likely to shrink by as much as 15% this year on the falling premiums cashed in from car policies, after a single digit decline in 2010, which may prove to be a deadly test for several players on this market, insurance execs believe.
“In 2011 we should see some insurance companies disappear and not just companies that do not matter in terms of market share. If we do not see bankruptcies, we will at least see companies placed under special supervision,” stated Cristian Constantinescu, chairman of the National Union of Romania’s Insurers (UNSAR), during a workshop organised by Media XPRIMM.
He expects the market to go down by 5% in 2011 at best, amid the 20% lower car policy tariffs.
In a bid to retain their clients or gain market share, insurers have slashed the tariffs of RCA policies, a segment that accounts for over one third of the general insurance market. The insurance market 70-80% depends on car policies, so that insurers are now waiting for lending to be resumed.