Angela TONCESCU, President, Insurance Supervisory Commission
2007 meant the awareness of the fact that we belong to the single European market, where the four freedoms are fully functional and generate new challenges for the Romanian insurance market.
XPRIMM: It's been more than a year since Romania's accession to the
European Union. What did this event mean for the insurance market?You can read the entire interview in the next Issue of PRIMM Magazine
Angela TONCESCU: 2007 meant the awareness of the fact that we belong
to the single European market, where the four freedoms are fully functional
and generate new challenges for the Romanian insurance market.
It also meant that the market embarked on a sustained process of training
the personnel, diversifying and improving the services they provide to customers,
getting involved in adapting the legislation to the new EU regulations.
XPRIMM: How would you describe the evolution of the Romanian insurance
market over the past year, both in terms of volume and level of maturity
and quality of products and services?
A. T.: Preliminary data for 2007 indicate that the Romanian insurance
market continued to grow, reaching a gross underwritten premium income of
approximately RON 7.17 billion, namely EUR 2.15 billion. In relation with
the Gross Domestic Product estimated by the National Institute of Statistics
for 2007 and amounting to RON 404.7 billion, the insurance penetration rate
in Romania is 1.77%, compared to 1.67% in 2006. The insurance density reached
about RON 333/capita in 2007, also higher than the previous year, when it
was about RON 266/capita.
Because people don't change their mindset overnight, the structure of the
two insurance categories did not undergo significant changes, as expected,
with almost 80% of the total premiums still coming from non-life insurance.
However, considering that the growth rate for life insurance premiums was
much higher than the previous year, we can estimate that 2007 meant a re-launch
for life insurance.
According to the region distribution of premium underwriting, almost 46%
of the premiums come from the region of Bucharest - Ilfov, and the density
here was approximately 4 times higher than the national average. Given this
context, I expect to see the other development regions create numerous business
opportunities for the insurance companies in the years to come. Therefore,
it is highly likely that the Romanian insurance market reaches, by 2017,
a level of gross underwritten premiums of about EUR 7.5 billion, representing
an average annual growth of 13 - 15% in euros.
As for the quality of products and services, the insurance markets are known
to have the highest flexibility when it comes to adapting their offer to
the existing demand. Thus, as long as there is an insurable risk and a community
of insured exposed to that risk, insurance companies are capable of expanding
the range of insurance products they offer, the investment requirements
being different depending on each company's strategy and distribution channels.
XPRIMM: What do you think the main influences on the insurance market
will be next year? Are we going to witness a decrease in the ratio represented
by motor insurance, or a re-launch of the life segment?
A. T.: The motor insurance market continued to grow strongly in the
first months of this year, which makes us believe that motor insurance shall
maintain the highest share this year. Meanwhile, if we consider the evolution
from 2007, we expect to see life insurance continue its growing trend this
year as well. In a few years, I think we'll be able to talk about a much
higher percentage for life insurance, but a complete reversal of shares
for the two main insurance categories, namely life and non-life, is expected
to take place on a longer term.
Editor: Mihaela CIRCU
| Published on 05.06.2008