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Evolution of the insurance market in the first trimester of the year 2019

 

Bucharest, 19 June 2019 -The insurance companies, authorised and regulated by the Romanian Financial Supervisory Authority (ASF), have written, in the first three months of this year, gross premium in value of 2,71 billion lei, growing up by 7,4% compared to the same period of the previous year.

The tendency to consolidate the life insurance market continued also during the 1st trimester of the year 2019. It registered an increase of 8,75% in comparison to the similar period of 2018 year. Nevertheless, the insurance market from Romania remains geared towards the non-life insurance activity, which holds 79% from the total of the gross written premium (GWP).

At the end of March 2019, all the insurance companies that fulfilled the conditions regarding the Solvency Capital Requirement (SCR) and also the minimum capital requirements (MCR). Also, the SCR and MCR rates, calculated at the market’s level as the ratio between total qualifying own funds that cover the capital requirements and the total value of the capital requirement, registered over unity values. The SCR rate, throughout the whole market, was at a level under 1,70 and the MCR rate at a value of 3.93.

On 31st of March 2019, activated 28 insurance companies on the insurance market, that were authorized and regulated by ASF, from which 15 practised only non-life insurance business (NLI), 7 practised only life-insurance activity (LI) and 6 practised composite activity.

The insurance market from Romania is characterized by a medium towards high degree of concentration. In the 1st trimester, 2019, approximately 91% from the total volume of gross written premium has been realized by 10 insurance companies from all 28 authorised companies.

Gross written premium (NLI+LI)

PBS corresponding to non-life insurances (NLI) increased during January-March 2019, to the value of approximately 2,14 billion lei, increasing with 7% towards the same period of the previous year, and PBS relating to life-insurances (LI) summed up approximately 575 million lei, with 8,75% more than the 1st trimester of 2018.

Gross paid indemnities (NLI+LI)

In the 1st trimester of 2019, the insurance companies reported gross paid indemnities (GPI) (by excluding maturities and partial and total surrender), cumulated for the two categories of insurances (NLI+LI), in amount of 1.393.450.954 lei. From this amount, 1.343.017.736 lei represents the GPI for the non-life insurance contracts (96%), in increase with 13% compared to the 1st trimester of 2018.

For the segment of life-insurances, the insurers reported a GPI in value of 50.433.218, with approximately 8% more compared to the similar period of 2018.

 

Damage rate

The combined damage rate, calculated on cumulated data for all classes of non-life insurances, have been in the first three months of the year, of 110,6%, in increase compared to the same period of last year, when it ranged at 99%.

RCA (civil liability insurance for vehicle owners) market

The total value of the written insurance premium for RCA insurances in the first three months of 2019 has reached the value of approximately 970 million lei, the rest up to the total of A10 class( 1,022 billion lei) representing the liability of the transporter for the cargo, in his quality as carrier and RCA written insurances on the territory of other EU state members, based on freedom to provide services. In comparison to the first trimester of the previous year, the value of the gross written premium has increased with approximately 4,65%.

On 31st of March 2019, the highest shares were held by the policies with a validity of 6 months (approximately 33%), respectively 12 months (33%).

Throughout the whole-economy, the first annualised RCA average increased noticeable, with approximately 3% in the 1st trimester of this year, in comparison with the same trimester from the previous year, registering the value of 609 lei.

The average damage RCA rate paid for bodily injuries in the first three months of 2019 decreased in comparison with the 1st trimester from the previous year with 9% and the one for property damage increased with 14%.

In the first three months from 2019, the RCA insurers, authorized and supervised by ASF, concluded a number of 63.464 direct settlement clauses, the gross written premium related to them being 5.980.405 lei.

Household insurance

On 31st of March 2019, the number of enforced contracts regarding the obligatory household insurance increased with 1% and the written gross premium, with approximately 2%. At the same time, the gross paid indemnities increased significantly, with 417%.

The business underwritten related to voluntary household insurances registered, during the first trimester of 2019, an increase of approximately 6%, in comparison to the first trimester from the previous year. The gross paid indemnities registered an increase of approximately 29% and the number of new contracts concluded during the reporting period increased with 3%.

Health insurance

Health insurances cumulated, at the end of the 1st trimester of this year, gross written premium in value of approximately 93,1 million lei, increasing with approximately 20% towards the same period of 2018:

  • The gross written premium related to non-life insurances have been in total of 62,5 million lei, increased with approximately 14% and represented approximately 67% from total GPI for health insurance business;
  • The gross written premium related to life insurances reached the value of 30,6 million lei, increased with approximately 33%.

Branches

On 31 March 2019, activated on the insurance market 11 branches, from which 8 practised non-life insurance activity and 3 branches practised life-insurance activity.

The branches cumulated, at the end of March 2019, gross written premium in value of 204,9 million lei, increasing with approximately 18% from the previous year. At the same time, the branches reported paid gross indemnities, cumulated for the two insurance categories, in total of approximately 204,9 million lei, increasing with 18% in comparison to previous year. At the same time, the branches reported gross indemnities, cumulated for the two insurance categories, in total of approximately 56 million lei.

Insurance brokers

On 31 March 2019, were registered in the records of the Financial Supervisory Authority a number of 340 authorised brokers, from which 296 active companies, 14 companies with temporary suspended activity and 30 companies with temporary interdicted activity.

Following the centralised reporting sent by broker companies, on 31.03.2019, has been recorded an increase of 8,4% of the intermediate premium values for non-life insurances and life insurances from 1.540.926.092 lei to 1.670.365.009 lei. In the first trimester of 2019, the insurance and/or reassurance brokers intermediated approximately 62% of the total volume of gross premium written by the insurers for the two insurance categories, with a slight increase in comparison to the similar period of 2018.

The incomes from mediation business obtained by the insurance brokers, in the first trimester of 2019 increased with 16% towards the same period of 2018, from 254.669.849 lei to 295.255.037 lei.

The exhaustive report regarding the evolution of the insurance market in the first trimester of 2019 can be accessed HERE.