The 2020 pandemic affected all sectors of Moldovan economy, including the insurance sector. Total number of new insurance contracts has decreased dramatically in the past months, a sharp decline being noticed in segments such as voluntary insurance and Green Card, CapitalMarket reports.

The number of Green Card policies in April dropped by 94% y-o-y, while the segment's corresponding GWP fell by 76%. At the same time, the number of domestic MTPL contracts decreased by 38% and its premiums went down by 18%. According to the preliminary data of the financial authority, the GWP reduction in voluntary insurance amounted to 50-60%, as Director of the Insurance Department of the National Financial Market Commission (CNPF) Tatiana CIOBANU explained.

However, the companies keep their solvency and compliance with financial and prudential requirements. Insurers also do not stop the claims payments under motor insurance, CIOBANU said.

The regulator has taken several measures since the start of the pandemic. One of those measures was the postponing of the insurers deadline for submitting reports for the first quarter of 2020, until mid-May this year. It was also decided to consider the contracts and policies of compulsory motor third party liability insurance as being valid when paying the premiums via electronic systems. Insurance companies were advised to avoid paying dividends and to make other types of capital distribution in return.

Tatiana CIOBANU noted that the consequences of the pandemic will be more obvious in the second half of the year, since after lifting of temporary measures, insurers will need time to get back on tracks. At the same time, she underlined that some companies are on the verge of bankruptcy, because during the pandemic, solvency was of prime importance. "Insurance companies with sufficient capitalization will not be so affected by the coronavirus crisis," CIOBANU explained.

Besides, another challenge for the market in 2020 will be liberalization of MTPL tariffs starting July 1. Two new bills on the insurance sector are planned as well: changes on insurance/reinsurance activities (with partial shifting of the Solvency Directive II) and changes on compulsory civil liability insurance for damage caused by motor vehicles (shifting of Directive 2009/103/CE), CapitalMarket reports.