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The evolution of the insurance market in 2019

Bucharest, April 3, 2020 - Insurance companies authorized and regulated by the Financial Supervisory Authority (ASF) signed, in 2019, gross premiums worth about 11 billion lei, increasing by more than 8% compared to the value registered in the year 2018.

The Romanian insurance market remains oriented towards the general insurance activity, which holds 79% of the total gross premiums subscribed by the insurance companies.

Non-life insurance

The total volume of gross premiums subscribed for non-life insurances, in 2019, was 8,724,822,308 lei, increasing by about 8.5% compared to 2018.

The first 10 insurance companies that have subscribed premiums related to non-life insurance accumulated a value of 8,352,591,267 lei, which represents about 96% of the total of this segment of activity.

Of the total gross premiums subscribed for non-lifel insurance, the highest weights are held by classes A10 - Civil liability for the use of land vehicles (46%), A3 - Land vehicles, excluding rolling stock (27%) and A8 - Fire and natural disasters - for goods other than those insurable in classes A3 - A7 (13%).

RCA insurance market

The total value of the gross premiums subscribed for RCA insurances in 2019 reached about 3.78 billion lei, the rest up to the total of class A10 representing the carrier's insurances for the goods transported as a carriage and the RCA insurances subscribed on the territory of other EU member states under the law of freedom to provide services. Compared to the previous year, the value of gross subscribed premiums increased by approximately 5%.

In the first two insurers, in 2019, approximately 71% of the RCA insurance portfolio in Romania accumulated. At December 31, 2019, the highest shares were held by the policies with a validity of 6 months, respectively 12 months.

Across the entire market, the first average annualized RCA increased by about 3% on December 31, 2019, compared to the same period of the previous year, registering the value of 631 lei.

In 2019, the RCA insurers signed a number of 205,330 direct settlement clauses, the gross subscribed premiums corresponding to them being 20,217,576 lei.

Home insurance

On the whole of the housing insurance market (compulsory and optional), on December 31, 2019, an increase in gross premiums subscribed by approximately 6% was recorded, compared to the same period of the previous year.

The number of compulsory home insurance contracts in force at the end of the reporting period (1,731,965) increased by about 2%, the gross subscribed premiums (in amount of 159,341,371 lei) increased by about 4%, while the allowances gross paid (5,347,535 lei) increased by 61%.

The subscriptions related to the optional housing insurance (gross premiums subscribed by 370,489,570 lei), during the year 2019, registered an increase of about 6% compared to the previous year, while the gross indemnities paid (93,467,335 lei) were in growth by about 46%, and the number of new contracts concluded during the reporting period (1,356,676) increased by 12%.

Life and health insurance

In 2019, the positive dynamics of the life insurance sector continued, manifested since 2015, and the volume of gross subscribed premiums remained at the highest level in recent years.

The gross underwritten premiums related to life insurance amounted to RON 2,255,941,294 on December 31, 2019, up 7.3% on the same period of the previous year.

The first two companies, from the point of view of the volume of gross premiums subscribed for the life insurance activity, had a cumulative market share of 53%. Also, 10 companies had a share of 97% of the total volume of premiums subscribed in this segment, with cumulative subscriptions amounting to 2,198,014,884 lei.

At the end of 2019, the health insurances accumulated gross premiums amounting to approximately 372 million lei, increasing by about 11.2% compared to the previous year. The number of contracts in force at the end of 2019 stands at 403,308, up 10% from the number of contracts in force at the end of 2018. Most of the contracts in force (366,712, representing over 91% of the total number of contracts) are concluded for health insurance similar to general insurance.

Gross allowances paid

In 2019, the insurance companies reported gross indemnities paid, cumulated for the two categories of insurance, in the amount of 5,994,188,760 lei, as follows:

  • 5,761,135,599 lei are related to general insurance contracts (96%), registering an increase by 17% compared to 2018 (4,930,614,341 lei);
  • 233,053,161 lei are amounts paid for gross indemnities, related to life insurance, registering an increase of about 26% compared to 2018 (184,615,224 lei).

The gross indemnities related to life insurance are added to maturities, partial and total repurchases, cumulated in the amount of 824,865,541 lei, slightly decreasing value compared to the one registered in 2018 (841,782,304 lei).

The Solvency Regime II

At the end of December 2019, both the value of the assets and the obligations of the insurance companies (measured according to the principles of the Solvency II regime) recorded increases compared to the values ​​recorded in the same period of the previous year. The total assets increased by 8%, and the total debts of the insurance companies increased by 7% in 2019 compared to the value registered in the previous year.

The value of the own funds eligible to cover the solvency capital requirement was at the end of 2019, at the level of 5.5 billion lei, increasing by 7% compared to the value recorded on December 31, 2018.

In 2019, the solvency indicators at the aggregate level of the insurance market continued to improve. The SCR and MCR rates, calculated at the market level as the ratio between the total of the eligible own funds to cover the capital requirements and the total value of the capital requirement, registered super unitarian values, increasing compared to the same period of the previous year. The market SCR rate stood at 1.78, and the MCR rate stood at 4.18.

Insurance brokers

In 2019, insurance and / or reinsurance brokers averaged 65.6% of the total volume of gross premiums subscribed by insurers for the two categories of insurance, increasing compared to the similar period of 2018. 

Following the centralization of the reports sent by the brokerage companies, on 31.12.2019, there is an increase of the value of the intermediate / distributed premiums for general and life insurance, of 12.90%, from 6,380,788,060 lei to 7,203. 671,303 lei.

Analyzing the structure of the intermediate insurance and / or reinsurance brokerages by general insurance classes, it is found that, in 2019, a significant share in the total of the general insurance intermediate premiums is held by the following classes:

  • class A10 - Civil liability insurance for vehicles (RCA + CMR) - 52.49%;
  • class A3 - Insurance of land means of transport (CASCO) - 24.66%;
  • class A8 - Fire and other natural disasters - 8.31%.

A significant weight in the total of the intermediate life insurance premiums (240,473,758 lei) is held by the following classes:

  • class C1 - Life insurance, annuities and additional life insurance - 85.84%
  • class C3 - Life and annuity insurance, which are linked to investment funds (unit-linked) - 13.97%;
  • the other life insurance classes accounted for 0.19% of the intermediate / distributed premiums for this category.

The report on the evolution of the insurance market in 2019 can be consulted HERE.

 

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About ASF

ASF is the national authority set up in 2013 through OUG 93/2012 approved by Law 113/2013, for the regulation and supervision of insurance markets, private pensions and the capital market. ASF contributes to strengthening the integrated operating framework of the three sectors, which amounts over 10 million participants. More information can be found at www.asfromania.ro.