The decline of the Romanian insurance market deepened in 2011. UNSAR members' underwritings 6% down to RON 6.5 billion

22 February 2012 — Andreea IONETE
The decline of the Romanian insurance market deepened in 2011. UNSAR members' underwritings 6% down to RON 6.5 billion
unsarThe gross written premiums by the National Union of Insurance and Reinsurance Companies in Romania (UNSAR) member companies amounted to RON 6.5 billion in 2011, 6% less than in 2010, when the underwritings volume reached 6.9 billion RON, influenced by the considerable decrease registered in motor insurance. In the last quarter of 2011, the insurance market faced a stronger back stroke compared to the same period in 2010, although the first three quarters have managed to slowly reduce the gap.

The 22 member companies of UNSAR own together 82% of the underwritings of the total insurance market, which makes the association an important barometer for the overall market results.

Thus, the total decrease of the market in 2011 continues the downward trend of the last 3 years, after a 5.7% drop in 2010.

Market results do not follow the trend set by Romania's macroeconomic evolution which, according to preliminary results, registered a 2.5% GDP increase. This is caused mainly by a weak evolution in the economic segments the insurance market depends on - the motor industry, leasing, real-estate, bank loans - and by the decrease of the population's purchasing power.

9% decrease on non-life insurance, 6.4% growth for life

As far as the main underwriting lines' evolution is concerned - non life and life insurance - they were completely different in 2011. Thus, while the first category continued to decrease during the entire 2011, the second one followed a growing trend most of the year.

The UNSAR insurers underwrote gross premiums of Ron 5 billion for non life insurance, 9% down compared to RON 5.5 billion in 2010. At the same time, life insurance posted a 6.4% increase up to RON 1.5 billion, compared to RON 1.4 billion in 2010.

The motor segment remains the main engine for the non life insurance market. In 2011, MTPL policies contributed to the decline of the UNSAR members' results, decreasing by 21% compared to 2010. On a similar note, Motor Hull decreased by 17%, being influenced by the collapse of new car sales. According to APIA, in 2011 the total motor vehicle sales decreased by 7.4% compared to 2010.

The voluntary household insurance is among the few business lines that grew in 2011, registering a 60% growth compared to 2010. According to UNSAR data, the number of voluntary contracts still valid at the end of the period reached over 4 million, compared to 1.8 million in 2010.

As far as life insurance sector is concerned, in 2011, the traditional were mostly preferred by the clients, the gross written premiums going up by 12% year-on-year. However, unit-linked insurance went down 2.3%, influenced by the clients' preference for lower risk products, to the detriment of investment profits.

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