Boston, MA -- (SBWIRE) -- 08/03/2012 -- Key Insights And Key Risks
The Romania Insurance Report considers the prospects for both life and non-life insurers in that country. The latest data from the regulator and the insurers' trade association confirm that non-life premiums contracted quite sharply during 2011. The general problem was the overall softness of the economy. In particular, the slump in premiums for motor-related lines - both compulsory motorists' third-party liability (CMTPL) and voluntary motor (CASCO) insurance - has been much larger than the growth in other lines (such as fire and all risks insurance). The insurers have suffered from the downturn in the number of cars being sold and leased. Vienna Insurance Group (VIG), whose subsidiaries account for about 29% of the non-life segment, suffered operating losses in Romania in 2011: this was in part due to a surge in motor-related claims. VIG is in the process of merging two of its non-life subsidiaries. It has introduced a number of innovative products and services over the last year or so and is actively working to reduce costs. The limited information available as of May 2012, in relation to other insurance companies, suggests that fortunes last year were mixed.
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Intriguingly, premiums are holding up in the life segment. Some of the companies that are active in the segment in Romania have indicated that their life premiums actually rose in 2011. This implies that density - although low by most standards - is actually increasing. The resilience of premiums for unitlinked products, which account for about 36% of all life premiums in Romania suggests that those (few) households who actually use life insurance are actually quite risk tolerant. While we envisage a further rise in density (which has been rising, but in a very erratic way over the last six years or so), we do not foresee that life insurance will become an important conduit for organised savings over the forecast period.
Over the last quarter, BMI has made the following changes:
- The analysis includes the final data published by the Insurance Supervisory Commission (ISC) and the National Association of Insurance and Reinsurance Companies from Romania (UNSAR in its Romanian acronym) in relation to both major segments in calendar 2011.
- The report includes the latest comments on operations in Romania from VIG and other players.
- The analysis takes into account BMI's latest assessment of the economic environment in Romania.
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