Romania 2020: 5.4% GWP growth y-o-y and improving combined ratio

25 March 2021 — Daniela GHETU
GWP by Romanian insurers, including branches of foreign companies operating on FOE, reached RON 12.5 billion (EUR 2.56 billion), up by 5.4% y-o-y (local currency). Insurers domiciled in Romania have provided for about 92% of this total, recording a 4.6% y-o-y growth rate, the market authority said.

According to the report published today, non-life insurance GWP accounted for 81% of the total GWP, reaching EUR 1.9 billion, while life insurance provided for GWP worth EUR 0.66 billion. Health insurance saw a 18% increase in GWP, to EUR 92.6 million, increasing their share in the market portfolio to 3.9%. In the volatile economic context caused by the pandemics, surety insurance recorded the most spectacular growth rate, of 68% y-o-y, to EUR 95.5 million. Motor insurance lines maintained their dominant position, accounting together (MTPL and Motor Hull insurance) for about 71% of the non-life GWP or 57% of the total GWP.

While GWP by branches of foreign insurers operating in Romania on FOE reached about EUR 205.37 million, insurers domiciled in Romania have written on foreign market premiums worth about EUR 73 million, up by 38% y-o-y.



Paid claims for life insurance (including partial and total redemptions and maturities) and non-life insurance totaled all together EUR 1.42 billion.

The combined ratio calculated on cumulative data for all classes of non-life insurance recorded a supra-unit value (105.79%) in 2020, improving as compared to the previous year (109.45%). This development took place against the background of the reduction of the loss rate and the maintenance of the expenditure rate at a level relatively similar to that recorded in the previous year, the market watchdog said.

At the end of 2020, technical reserves held by Romanian insurers amounted to EUR 3.7 billion, 6% up y-o-y. Out of this total, 55% are reserves set up for non-life insurance, while 45% of the total technical reserves are set up for life insurance business.

GWP intermediated by insurance brokers amounted to EUR 1.6 billion in 2020, increasing by 9.1% y-o-y. The average intermediation fee's value was of 17.74% at market level: 17.77% on the non-life insurance segment, and 43.49%on the life insurance segment.

The insurance penetration degree, calculated as the ratio between the value of aggregated GWP at market level (excluding reinsurance activities and gross premiums written in other countries) and GDP, recorded a value of 1.17% in 2020, slightly higher than in 2019 (1.10%). At the same time, the insurance density indicator (the annual expense on insurance per capita) reached EUR 129.38, which is by about 5% more y-o-y.

Exchange rate as of December 31st, 2020: 1 EUR = 4.8694 RON

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