New market study, "Romania Insurance Report Q3 2016", has been published
Fast Market Research recommends "Romania Insurance Report Q3 2016" from Business Monitor International, now available
[ClickPress, Tue Jul 19 2016] We retain our broadly positive outlook for the Romanian insurance market in 2016 and beyond, out to the end of our forecast period in 2020. The life sector is in its early stages of development with low rates of density and penetration, having largely been constrained by disposable income levels in the country. Rising incomes will bolster life insurance uptake in the country and make it more affordable. The non-life sector is more established, though largely dominated by basic motor and property lines. We identify the primary drivers of growth as rising average household incomes, growing private final consumption levels, higher disposable incomes and positive macroeconomic market fundamentals. We believe that this growth could attract more foreign investment to the small Romanian market, though some regulatory uncertainty could deter potential investors.
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Latest Updates And Developments
Carpatica Asig was placed under a resolution mechanism in January after being investigated for fraudulent reports and a deteriorating financial situation. The only foreign investor, International Insurance Consortium, backed out of the bid to acquire Carpatica after it stated it was not given full access to the troubled company's financial situation.
Regulatory oversight and transparency in the market have come under criticism in Romania following the bankruptcy of leading domestic firm Astra in late 2015 and arrest of Dan Adamescu, who has been charged with abuse of office, money laundering, and complicity to abuse of office by public officials. Adamescu has been given a four-year and four-month jail sentence for bribing judges and is being prosecuted for the mismanagement and eventual bankruptcy of Astra, according to local news media reports.
Despite these concerns, we are forecasting steady growth in motor insurance premiums between 2016 and 2020, as new vehicles sales grow strongly and insurers improve cost controls. This underpins our forecasts for growth in the overall non-life sector, with premiums forecast to reach USD2.1bn in 2020, up from USD1.6bn in 2016.
We are forecasting stronger growth in the small life segment, supported by improving household income rates as well as demographic trends. Life premiums are forecast to reach USD710mn in 2020, up from USD434mn in 2016.
The Romania Insurance Report has been researched at source and features BMI Research'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.
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