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The evolution of the insurance market in the first three months of 2020

Bucharest, July 24, 2020 – The insurance companies, authorized and regulated by the Financial Supervisory Authority, have subscribed, in the first three months of this year, subscribed gross premiums, in amount of 2.95 billion RON, increasing by 8.8% as compared to the same period of the previous year.  

The inclination to reinforce the life insurance market continued also along Quarter I of 2020. The latter registered an increase by 7.2%, as compared to the similar interval in 2019. Nevertheless, the insurance in Romania rests oriented towards the general insurance activity, which holds a share of 70% of the total gross subscribed premiums (Ro. PBS). 

At the end of March, 2020, all the insurance companies met both the solvency capital requirements (Ro.SCR), as well as the minimum capital needs requirements (Ro.MCR). Also, the SCR and MCR rates are being calculated at the market level, as the ratio between the total own funds eligible to meet the capital requirements and the total value of the capital needs have registered over-unity values, increasing as compared to the same period of the previous year. The SCR rate at the level of the market was at a level of 1.73 and the MCR rate at a value of 4.31.

At March 31, 2020 were activating on the insurance market 20 insurance companies, authorized and regulated by the Financial Supervisory Authority, of which 15 have practiced exclusively general insurance activity (Ro. AG), 7 have practiced only life insurance activity (Ro. AV) and 6 have practiced composite work.   

The insurance market in Romania remains characterized by a medium to high concentration degree. In Quarter I of 2020, approximately 89% of the total volume of gross subscribed premiums has been achieved by 10 insurance companies, among the 28 authorized companies. 

Subscribed Gross Premiums AG+AV

PBS related to the general insurances (AG) have increased, during January – March, 2020, to the value of approximately 2.34 billion RON, increasing by 9.2% as compared to the same period of the previous year, and PBS related to life insurances (AV) amounted to approximately 616 million RON, 7.2% higher as compared to Quarter I of the year 2019.  

Gross paid Allowances (AG+AV)

In Quarter I of the year 2020, the insurance companies have reported gross paid allowances – (Ro. IBP) (excluding maturities and partial and total ransoms), cumulated for the two insurance categories (AG+AV), in amount of 1,581,749,239 RON. Out of this amount, 1,523,522,090 RON represents IBP for the general insurance contracts (96%), increasing by 13% as compared to Quarter I of the year 2019. For the life insurance segment, the insurers have reported IPB in amount of 58,227,149 RON, approximately 15% higher YoY.

The Damage Rate

The combined damage rate, calculated on cumulated data for all general insurance classes, was, in the first three months of the year, of 102.98%, decreasing as compared to the same period of the previous year, when it reached 110.63%.

MTPL Market

The total value of the insurance premiums subscribed for the MTPL insurance, in the first three months of the year 2020, has reached the level of approximately 1.01. billion RON, the rest, up to the total of class A10 (1.07 billion RON) representing the insurances of the transporter for the freight transported as carrier and the MTPL insurances subscribed on the territory of other EU member states based on the right of freedom to provide services. As compared to the first Quarter of the previous year, the value of subscribed gross premiums has increased by approximately 4%.

At March 31, 2020, the highest shares were held by the policies with a validity of 6 months (approximately 34.65%), namely 12 months (32.87%).

Across the whole market, the MTPL average annualized premium has slightly increased, by approximately 4%, in Quarter I of this year, compared to the same Quarter of the previous year, registering the value of 632 RON.

The MTPL average damage paid for personal injuries, in the first three months of 2020, has increased by approximately 2% YoY, and the one for material damages has increased by approximately 1%.  

In the first three months of 2020, the MTPL insurers, authorized and supervised by ASF have concluded a number of 55,714 direct settlement clauses, the subscribed gross premiums related thereof being of 5,565,638 RON.

Dwellings Insurance

At March 31, 2020, the number of contracts in force related to the mandatory dwellings’ insurance has increased by approximately 3%, and the subscribed gross premiums by approximately 7%. Meanwhile, the gross paid allowances have decreased by 7%.  

The subscriptions related to the facultative dwellings’ insurances have registered, along the first Quarter of the year 2020, an increase by approximately1% as compared to the First Quarter of the previous year. The gross paid allowances have recorded a slight decrease and the number of new contracts concluded during the reporting period has increased by 5%.  

Health Insurance

The health insurances have cumulated, at the end of Quarter I of this year, subscribed gross premiums in amount of approximately 142 RON, increasing by  approximately 53% YoY, as follows:

  • The subscribed gross premiums related to general insurances were in amount of 89 million RON, increasing by approximately 44% and represented around 63% of the total PBS for the health insurance activity;  
  • The subscribed gross premiums related to life insurances have reached the value of 53 million RON, increasing by approximately72%.

Branches

At March 31, 2020 were activating on the insurances market, 13 branches, of which 10 practiced general insurance activity and 3 practiced life insurance activity.

The branches have cumulated, at the end of March 2020, subscribed gross premiums in amount of 248 million RON, increasing by approximately 21% YoY. Meanwhile, the branches have reported gross paid allowances, cumulated for the two insurance categories, in amount of around 81 million RON. 

Insurance Brokers

At March 31, 2020 appeared registered in the records of the Financial Supervisory Authority a number of 298 authorized brokers, of which 287 active companies, 10 companies with adjourned activity and a company with a temporarily banned activity.

Following the centralization of the reports sent by the brokerage companies, at 31.03.2020, it was found an increase by 15% of the value of brokered premiums for general insurance and life insurance, as compared to the same period of the year 2019, from 1,670,365,009 RON to 1,920,991,817 RON. In the first Quarter of 2020, the insurance and/or reinsurance brokers have intermediated 65.1% of the total volume of gross premiums subscribed by the insurers for the two insurance categories, increasing as compared to the similar period of 2019.  

The revenues from the brokerage activity earned by the insurance brokers, in the first Quarter of 2020, have grown by 13.64% YoY, from 295,255,037 RON, to 335,534,558 RON.

The exhaustive report with regards the evolution of the insurance market in the first Quarter of 2020 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.