INSURANCE Profile: The market froze in 2009
The figures recorded by Romanian insurance companies last year do not bring too good news for insurance. If, at the end of 2008, the market had registered underwritings that totaled over EUR 2.4 billion, creating the feeling that in the next period a sligh increase of the market could cause the surpassing of the psychological threshold of EUR 2.5 billion, here we see that 2009 registered a decrease of about 13% in euro, up to a total volume of underwritings in life and general insurance of over EUR 2.1 billion, according to INSURANCE Profile.
Therefore, for the first time on the red, the insurance market ended 2009 with a decrease of 13% in euro, and the only consolation seems to come from the fact that GDP fell by over 15% last year. The superior decrease registered at the GDP level determined a poor assessment of the degree of insurance penetration. If in 2008 insurance represented 1.77% of GDP, behold, last year the share of gross written premiums in Romania's GDP rose to 1.82%.
Taking into account the local currency depreciation, insurance density fell below the psychological level of EUR 100 per capita, to EUR 97.10 per capita, compared to the value of EUR 111.75 recorded in 2008. In national currency, insurance density was kept at around RON 411 per capita.
Decrease on all classes, with one exception: MTPL!
The evolution on insurance classes fits the dynamics shown in the first three quarters of the year. The big loser of 2008 was the life insurance segment. On the mentioned class, the decrease in European currency was about 22%, which means a minus of about EUR 110 million, which represents approximately one third of the decrease in absolute value registered at the whole market's level.
With gross written premiums on life insurance amounting to almost EUR 390 million, life insurance lost 2 points of the share it held in the portfolio of the market by insurance classes, reaching 18.47% of total written premiums in 2009 in Romania.
General insurance gained 2 percentage points as share in the total underwritings, only because life insurance had higher negative dynamics. Almost 11% was the decline in euro recorded on non-life insurance that represents 81.5% of the market, compared to 79.4%, the share that the above-mentioned insurance category had at the end of 2008.
Exception from the negative market dynamics is represented by MTPL insurance, whose positive evolution was due not so much to the increase of the number of sold policies, but to tarrifs adjustments of the insurers.
Thus, motor insurance segment reached 62.6% of the market. The 5% increase correspondent to MTPL insurance was attenuated by the over 18% decrease, that is EUR 10 million less, registered on the Motor Hull insurance.
Property insurance fell below the market average, which brought a gain of almost 0.5 percentage points, to 12.3% share of the insurance market, although the reduction registered for the above-mentioned insurance class was, in the analyzed period, of - EUR 11.7 million for fire and allied perils insurance, respectively of - EUR 16.2 million for damages to property insurance. Cumulated, underwritings correspondent to property insurance totaled EUR 260 million.
Preliminary results registered by the insurance and insurance brokerage companies in 2009 can be read only in Number 1/2010 of the Specialty Review INSURANCE Profile that has been launched at the end of March.
Author: Alex ROSCA
on 30.03.2010
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