XPRIMM Annual Forecast Meeting: 3% - 5% growth for the Romanian insurance market in 2013

31 January 2013 — Andreea IONETE, Vlad BOLDIJAR
XPRIMM Annual Forecast Meeting: 3% - 5% growth for the Romanian insurance market in 2013
forecast2013On January 28, the leaders of the Romanian insurance industry reunited during the XPRIMM Annual Forecast Meeting to discuss the expectations and evolution trends for 2013. For this year, most of them anticipate a stagnation or a small growth of 3% to maximum 5% of the insurance market.

"In 2013, I estimate a 2-3% increase on the non-life insurance market. I would like to be more optimistic, I would like to see a 5-6% increase, but I do not believe that this will be the case," affirmed James GRINDLEY, CEO and President of the Managing Board, CertAsig. As far as motor insurance is concerned, "the increase of in the MTPL prices is a good thing, as I am convinced that this will increase the competition in a healthier way," he stated.

Mihai TECAU, the leader of OMNIASIG VIG, does not expect great changes in 2013 as compared to with 2012. "The market increase this year will be around 3-5%," he declared. Given the economic environment which is not expected to evolve significantly, along with the low income of the population, Mihail TECAU considers that the word that best defines the situation on both the insurance market and the economy on the whole is 'numbness'.

According to Mariana DIACONESCU, President, ASIROM VIG, the most important objectives for 2013 include the stabilization of the companies' costs, not in order to gain profit, but with a view to balancing incomes and costs. "As for the insurance market, it will not do better or worse than the average national economy in 2013. And, as far as the economy is concerned, the specialists are not optimistic, but rather prudent. The insurance market will increase by 5% at most", Mariana DIACONESCU added.

Radu MUSTATEA, Member of the Managing Board, CARPATICA Asig, points out that the results of the national economy continue to have a strong influence on the insurance market which is, in fact, one of the three main financial sectors in Romania. Thus, "the market will report a one-digit growth at most, if nothing changes the current situation, such as an external influence or the intervention of the Insurance Supervisory Commission (CSA)." According to Mr. MUSTATEA, CSA should offer some guidelines regarding the property market, the MTPL segment and the legislation changes.

Communication is the key for solving market issues. "As far as I can tell, an efficient communication between the professional associations and the supervisory authority in Romania is essential," Richard KOLARIK, GRATEX International stated.

Romeo JANTEA, Vicepresident, UNIQA Asigurari, considers that in 2013 the insurance market will stop decreasing, but the growth rate will be under 5%. A two-digit growth would be impossible, even with an increase of the MTPL tariffs: "The MTPL prices will increase in the following 2-3 months, but the immediate result will be a high number of MTPL policies with a six months validity, so we will be able to see the influence of this phenomenon on the total subscriptions in 2014, not in 2013."

"In 2013, I estimate a 2-3% increase on the non-life insurance market. I would like to be more optimistic, I would like to see a 5-6% increase, but I do not believe that this will be the case," affirmed James GRINDLEY, CEO and President of the Managing Board, CertAsig. As far as motor insurance is concerned, "the increase of in the MTPL prices is a good thing, as I am convinced that this will increase the competition in a healthier way," he stated.

The MTPL insurance segment will remain one of the main issues in 2013. "I am surprised to see that you can offer your clients a lower prices, not a higher ones. (...) The MTPL insurance market is completely abnormal. I do not believe that the prices will grow, even with the interventions of the Insurance Supervisory Commission (CSA). If there is be an increase on the market, it will not exceed 5%. As a brokerage agent, I see that the MTPL prices have remained constant for the past 3 years," Viorel VASILE, General Manager, SAFETY Broker, explained. This year, one positive aspect for the brokerage market will include the investments in the online business, "which will explode in 2013, due also to the clients' increasing interest for the online environment," added Viorel VASILE.

Adrian MARIN, CEO, GENERALI Romania, summed up: "In 2013, on the MTPL segment, the market will increase by 5-7%, even by 10%, but the insurance market as a whole will not grow by more than 2%. And if we exclude the companies' business, outside the country, the market will slacken."

Aurel BADEA, General Insurance Underwritings Manager, ALLIANZ-TIRIAC, pointed out that "predictability and stability are the two most important elements for the economy, the business environment and the insurance market, and this is what we expect from the new Government." According to him, one of the insurance segments that will decrease in 2013 is Motor Hull.

"In 2012, the brokerage insurance market in Romania mediated 41% of the total insurance market. I don't see it this as an 'excellent' result, because it doesn't mean that much. In Bulgaria, for example, 67% of the insurance market was mediated by the brokerage companies. I suspect that in 2013, the Romanian brokers will mediate 45% of the market", Bogdan ANDRIESCU, President of UNSICAR, declared. For this year, he estimates that the insurance fraud cases will increase, because of the decreases on in the economic sector.

A similar situation, with one-digit growths, is reflected by the life insurance market in Romania. Florina VIZINTEANU, President, BCR Asigurari de Viata VIG, does not anticipate dramatic changes on this segment in 2013, expecting a small increase of maximum 2%: "This year will not be bad for the life insurance sector. It will bring an increase, but we shouldn't expect spectacular growth rates, such as those reported in 2005-2006."

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