Angela TONCESCU, President, Insurance Supervisory Commission

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?
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.