Bucharest, 8 August 2022 - The MTPL market confirms, after the first half of 2022, that it has managed to overcome the effects of the disappearance of City Insurance S.A., the former leader in the sector.
The effectiveness of the unprecedented measures taken by the Financial Supervisory Authority (FSA) both in terms of legislation in the field and in terms of control and supervision is confirmed by the preliminary data reported by insurance companies for the first 6 months of 2022.
Specifically, the level of market concentration, while still high, is at its lowest level in eight years. After growing substantially in the context of the exit of City Insurance S.A., Euroins, the current leader of the MTPL market, returned to the level of the same period of 2021 in terms of market share in the second quarter of this year, dropping to 31.8% in June 2022 from 36% at the end of March this year.
When correlated with the evolution of the other companies authorised to sell MTPL, the dynamics of the market share of the largest player suggests that the insurance deficit created by the exit of City Insurance S.A. has been covered in a balanced way by the whole market, without the emergence of distortions that would burden one player to an alarming extent. This can also be seen from the payment situation of the eight active players in the first half of 2022. Euroins has a share of more than 50% of gross compensations.
Euroins behaviour is also the result of the actions of the Financial Supervisory Authority (FSA), which has been active through permanent supervision and control actions, some resulting in sanctions.
The ranking of the top three players, based on Gross Written Premiums (GWP), is completed by Groupama with a market share of almost 21% and Allianz Țiriac with almost 19%, both companies evolving almost constantly in the second quarter of this year. With the exception of Generali, all other companies have shares between 6% and 8%, with Axeria Yard, a French company that in June was approaching 6% of the market, although it did not enter Romania until December 2021.
MTPL prices have stabilised and are even falling. The combined rate is also falling.
A positive development can also be observed in terms of prices. Average prices have stabilised and even entered a downward trend since the second quarter of this year, according to data centralised by the FSA. The average premium for individuals was Lei 904 at the end of June, as compared to Lei 913 at the end of March. For legal entities, the average premium remained at about the same level, at Lei 1,984, compared to Lei 1,943 in March.
Compared to the first part of year 2021, the increases are still substantial, but the stabilisation and even slight decrease at the individual level are positive signs that market diversification is having tangible results.
Indicators have also improved in terms of damages. At the market level, the combined rate reached 107%, as compared to over 112% at the end of the first quarter of this year, over 142% in the second quarter of 2021 and over 161% at the end of 2021.
The level of premium commissions paid by insurers for the distribution of MTPLs fell to 10.72% in the first half of 2022 as compared to 14.40% in the first half of 2021. At the same time, the loss ratio fell substantially in Q2 of this year to 74.85% from 109.15% in Q2 2021. This dynamic shows that insurers have substantially reduced their losses. We remind you that the combined loss ratio is calculated as the ratio of the sum of compensations paid and distribution and administration expenses and gross premiums earned, respectively.
About the Financial Supervisory Authority
The Financial Supervisory Authority is the national authority, established in 2013 by GEO 93/2012 approved by Law 113/2013, for the regulation and supervision of the insurance, private pension and capital markets. The FSA contributes to strengthening the integrated framework for the functioning of the three sectors, which together account for more than 10 million participants. More information can be found at www.asfromania.ro.