Romania Insurance Report Q1 2015 - New Market Report

Whilst we anticipate modest growth in total premiums written towards the latter part of our forecast period in US dollar terms, the overall outlook for the profitability of the sector remains bleak. On a brighter note, Romania has the largest presence in the SEE (South East Europe ) top 100 insurers with 21 entrants, the highest being Astra SA ranked at number 6.

None of the trends that are evident in the non-life segment, which dominates Romania's insurance sector, are positive. As a consequence of cut-throat competition, prices in the unprofitable motor related sector continue to fall. Several of the market players, sensibly, are trying to refocus their business on non-motor lines. However, in a patchy economy, volumes and prices are slipping in a number of non-motor lines. All this is at a time that the insurers are coming under greater scrutiny from the Autoritatea de Supraveghere Financiara (ASF - the regulator) through a formal Asset Quality Review (which will be completed by mid-2015), and other official initiatives. The government plans to establish CEETAR, a monopoly agency that will undertake all assessments of damaged motor vehicles. If this proposal, which both insurers and insurance brokers are opposing strenuously, goes ahead, we believe that the likely impact will be a deterioration in the loss ratios of motor insurers . Surprisingly, foreign companies are still seeking a foothold in the Romanian market. Taking a five-year view, we would be surprised if there is not significant consolidation in what is currently a fragmented landscape.

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The main trend in the smaller less developed life segment is continuing low overall growth in premiums. Households' and companies' appetite for the offerings of the life insurers has been curbed by the still generally difficult economic environment. Crucially, a major problem remains the low level of income of many households, who cannot therefore afford life insurance. Nevertheless, we note...

The Romania Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's Romania Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Romanian insurance industry.

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