The international crisis does not reach the Romanian insurance market
The financial stability of the Romanian insurance market has not been influenced
by the external crisis. The effect of the turbulences was faintly felt, considering
the decreased level of investments by the resident companies on foreign money
markets, according to the 2008 Financial Stability Report by the Romanian National
Bank.
The main risks that can cause certain tensions on the insurance market are the
rise of the paid losses in the non-life sector and the decrease of the capital
market which had a negative influence on the assets for the life insurance investments.
The BNR report mentions that "the effect of the turbulences from the foreign
financial markets is limited, without generating risks that can affect the stability
of this sector. The exposure of the insurance companies on the stock market as
well as on the real-estate market, are relatively low and superior rates of return
for these investments in the previous years can absorb the possible losses".
The BNR specialists believe that "Even more, life insurance companies make
long-term investments, anticipating possible corrections of the market and they
transfer the market risk to the clients in the case of the unit-linked insurance".
The economical growth as well as the increasing concern of the population for
life insurance provided the life insurance industry with the means to accelerate
its ascent over 2007.
The industry's growth to 2.2 billion EUR has surpassed by 9% de dynamic of the
GNP (24.8%). The penetration degree of insurance reached 1.8% (1.67% in 2006);
still lower then most of Eastern and Central Europe.
Nevertheless, as far as the profitability of the market goes, for the second
year running, it managed to register a net loss of 76 million EUR. This financial
result will not destabilize the market nor will it influence the safety of the
insured, according to the President of the Insurance Supervisory Commission,
Angela TONCESCU.
Author: Andreea IONETE
on 30.06.2008
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