STATISTICS: ROMANIA: Over 9% increase in Q1 and for the first time GWP cover 100% of damages and expenses

Gross underwritten premiums in the insurance market in the first quarter of this year totaled RON 2.43 billion (~EUR 540 million), up 9.16% compared to the same period in 2015, according to the market evolution presented by the Romanian Financial Supervisory Authority (ASF). Growth has been fueled by the non-life insurance segment, which recorded an advance of 9.74%, approaching the threshold of RON 2 billion, as well as the life insurance segment, in which underwritings increased by 6.6%, amounting to RON 438 million.

The following statement was released by the Financial Supervisory Authority (ASF).

Insurance market was still dominated by auto policies, the share of civil liability insurances (Class X) climbing in the first quarter to over 56%, with 20 percentage points over the last three years.  Adding land vehicles insurance, excluding the railway (Class III) gives an overall auto insurance accounting for 76.34% of the general insurance underwritings.

Civil liability insurance (MTPL) exceeded the first quarter the threshold of two million contracts concluded, the number of new policies being by 64,386 more than in the corresponding period of 2015, while the increase of enrollment is an essential precondition for market recovery. In total, on 31 March 2016, there were 4,652,631 MTPL policies in force, of which 3.5 million concluded by individuals, up 3% compared to the first quarter last year. The volume of gross underwritten premiums in the MTPL segment thus surged to over RON 1bn, being by 31.6% higher than in Q1/2015.

The average MTPL damage paid in the first quarter of 2016 fell to RON 6,874, compared to a peak of RON 7,769 reached in Q4/2014, but was by RON 205 higher than in the first quarter of last year.  If the evolution of the average damage confirms in the following quarters the decline posted compared to Q4/2015, there are prerequisites to cap the MTPL tariff increase, given that the damage is the main cost influencing the price of policies. The average premium for MTPL insurance was in Q1 RON 747, up 26.2% compared to the same period of last year, respectively 0.9% vs. Q4/2015.

An important signal of rebalancing of the MTPL market was the decrease for the first time in the combined damage rate (damage rate plus expense ratio) to 101.66%, compared to 127.5% two years ago, in conditions in which the damage rate plunged to 69.8% and the expense ratio fell to 31.8%, compared to 40.7% in Q1/2014. In the auto insurance segment of Class III (Insurance for land vehicles, other than railway), the combined damage rate fell below 100%.

In the MTPL segment, the share of expenses with fees for brokers in the gross underwritten premiums fell for the third year in a row, from 17.3% in Q1/2014 to 14.13% in Q1/2016. The average share of expenses with fees in all the general insurance classes fell from 16.67% in Q1/2014 to 13.49% in Q1/2016.

The 35 insurance companies active in the market in the first quarter of this year paid gross indemnities of RON 913 million in the general insurance market, down 16% compared to Q1/2015, respectively RON 186 million for life insurance, i.e. a total of around RON 1.1billion.

In the first quarter, a number of 32 insurance companies were subject to Solvency II Directive, entered into force at European Union level as of 1 January 2016 and which provides for higher capital requirements, in direct correlation with the level of risks undertaken by insurers. Overall, insurers reporting to the Solvency II regime, the value of own eligible funds covering the solvency capital requirement (SCR) increased by 1.5% in Q1/2016, to RON 4.02 billion. On 31 March 2016, the level of own eligible funds was positive for most companies, and the SCR rate was above par, while the capital held by insurance companies is of very good quality (mainly equity).

Access www.xprimm.com and download the 1Q2016 Romanian insurance market statistics.

Market indicators (in EUR and RON):
  • GWP
  • Growth rates
  • Portfolio
Market rankings (in EUR and RON):
  • All insurance market
  • Life insurance
  • Non-life insurance
  • MTPL

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