Romania 2005 - Territorial Profile
Gross written premium
According with the figures provided by the National Institute of Statistics (NIS) the total amount of GWP reached RON 4.42 billion (EUR 1.21 billion) by the end of December 2005. The real growth reached 17% in the analyzed period as compared with 2004 figures.
More than half from the gross premium were written in Bucharest and Ilfov County during the analyzed period. Thus the market concentration is keeping high level in the mentioned area. The weight held by Bucharest and Ilfov County in the total market reached 50.82% by the end of 2005, facing a light increase by 0.42 percentage points as compared with the same indicator value recorded in 2004.
Cluj, Timis and Prahova are, in the mentioned order, the first three counties in the regional top of gross premium written in 2005. The total amount of the premium written in Cluj County represents 3.5% from the insurance market and a total amunt of EUR 43 million (RON 155 million), reaching a real growth in RON of 25% as compared with the value of the same indicator recorded during 2004.
Timis County recorded a real growth in RON of 15% up to the level of EUR 29.4 million (RON 106.6 million). The mentioned figures placed Timis in the 2nd place in the counties GWP top. Although Prahova County faced only a slight increase of just 4.36%, the difference between gross written premiums in the mentioned county and the value of the same indicator for Timis is less than EUR 350.000. Prahova county is placed third in counties top.
As we said before, during the analyzed period the real growth in RON recorded 17%. Vaslui, Salaj and Arges counties have noticed among the most relevant risings in national currency: 55.61%, 51,61% respectively 47.79%. Using as a criteria the value of GWP added as compared with the results of 2004 the top three counties are Cluj with an extra RON 40.3 million added to 2004 amount of GWP, Arges with extra RON 40 million and Timis with RON 21.13 million. Bucharest and Ilfov added up held more than 52% from the value of the growth of the GWP during the analyzed period.
Insurance density
There are still much to do in this field as we may say after a first look over the figures regarding insurance density in Romania and in each county as we don’t dare to compare the average country level value of EUR 56.1 of the mentioned indicator with the values recorded by EU member states during 2005.
As we could easily predict, Bucharest inhabitants spent the highest amount with insurance in 2005. Insurance density reached EUR 281 in 2005 more than ninth times higher than the value of EUR 31 recorded in the other counties.
Local offices
171 from 1,385 regional offices existing in Romania in the analyzed period were located in Bucharest and Ilfov County. During 2005, 171 new offices were established in Romania from which 24 were established in Bucharest.
Cluj, Suceava, Brasov, Bihor, Hunedoara and Timis are the counties where are located the most territorial offices. In the mentioned counties the number of local offices overcame the value of 40 offices per each county. At the opposite pole we may emphasize Tulcea, Giurgiu and Mehedinti with 15, 16 respectively 18 local offices.
As we mentioned before, territorial distribution of the insurers was improved by the establishment of 171 new local offices. Moldova was the insurers main target with 32 new local offices established in Suceava, Iasi and Botosani. Counties where the presence of the insurers offices decreased are Bistrita-Nasaud, where four local offices were closed, Mehedinti - three, Arad - two. Buzau, Covasna and Tulcea lost one local office per each county in the analyzed pe-riod.
Analyzing the figures we reached the conclusion that the average amount of premiums written by every local office totalized during 2005 about EUR 880,000. Excluding Bucharest for which the average of GWP per local office exceeds EUR 3.6 million the country average of GWP per local office is close to half million euro.
Analyzing through the perspective of GWP/ local office the most efficient counties in 2005 were Cluj (EUR 950,000/local office), Buzau (EUR 840,000/local office), Prahova (EUR 810.000/ local office) and Arges (EUR 800,000/ local office).
24 counties recorded values of the mentioned indicator below the regional average of EUR 500,000. Thus, four from the 24 mentioned counties recorded values less than EUR 300,000 / local office: Ialomita, Teleorman, Caras-Severin and Botosani.
Human resources
By the end of 2005, 15,430 people were working in insurance market less with 1,427 than the value recorded by the end of 2004 decreasing by 8.47% as compared with the results from the similar period.
From the total amount of the people working in insurance market, 13,788 were occupied in the field with 698 less than the amount recorded in 2004. Anyhow, the average number of employees increased by 798 during the analyzed period up to the value of 13,119.
Bucharest and Ilfov County held 4,332 employees in insurance business. The next areas after the number of employees are Cluj with 626 persons, Arges with 440 respectively Timis with 365. Tulcea, Mehedinti and Giurgiu are the areas for which the total number of employees is less than 130 in each county. This number is justified by the potential and the share of those areas in the total amount of GWP in the market.
Also it is interesting to analyze the evolution of the employees number which witnessed a decrease by 5% during 2005. Only 10 from the 41 counties witnessed an increase of the number of employees. Thus, Bucharest and Ilfov County recorded an increase of the employee number by 587 more than during 2004. Ialomita, Vrancea and Salaj are the next areas in the top of employees number increasing during the analyzed period.
31 counties recorded a decrease of the employees number. The areas with the most significant decrease are Hunedoara, Prahova and Cluj.
In efficiency terms the figures provided by NIS stated that during the analyzed period the average amount of GWP from an insurance worker reached EUR 88,000. The highest rate was recorded in Bucharest and is situated around EUR 140,000 per employee. The national average excluding Bucharest and Ilfov County exceeded EUR 64,000.
The most performing counties for the mentioned indicator are Buzau, with an average of more than EUR 111,000 per employee, Prahova with EUR 87,000 and Constanta with more than EUR 83,000 GWP by each employee. Ialomita, Teleorman and Caras-Severin are situated at the opposite pole.
Efficiency Indicators
The performances accomplished at regional level have to be corroborated with the regional network development and with the human resources that are distributed across the country.
In Romania the insurance market had one insurance employee for every 1,576 inhabitants during the analyzed period. A good figure was recorded in Bucharest and Ilfov with one insurance employee for every 500 inhabitants. The figure is justified by the market concentration of more than 50% held by the mentioned area. The ratio level between number of insurance employees and inhabitants, excepting Bucharest and Ilfov County recorded an average of one insurance employee per 2,100 inhabitants.
Until now, Bucharest holds the first rank at all previous analyzed indicators. But we may easily reach to the value of another efficiency indicator which emphasizes the GWP in the market for each euro spent by the insurers with payment of the employees. At the mentioned indicator Bucharest does no longer hold the first place.
The value of the mentioned indicator was of EUR 14.66 during the analyzed period. Thus, for every 1 euro spent with employees payments the insurers subscribed gross premium amounting about EUR 15.
From the perspective of this indicator the insurers from Buzau are the leaders of the market with GWP amounting EUR 24 for each 1 euro spent with the employees.
Prahova and Arges reached a ratio of 17 EUR of GWP per 1 EUR spent with the employees. Bucharest and Ilfov County are placed 4th with an amount of 16 EUR of GWP for one euro spent with the employees.
The figures referring to the payments with the employees emphasized that the total amount of the mentioned payments reached by the end of 2005 the amount of EUR 82.6 million. From this amount, the spending with employee in Bucharest and Ilfov County represented EUR 38.26 million.
The insurers from Bucharest and Ilfov spent monthly with one employee an average amount of EUR 826. Cluj is next to Bucharest after the mentioned indicator, totaling payments of EUR 4 million meaning an average sum of EUR 400 spent monthly with each employee.
Obviously, the figures presented in this hereby article have a pure statistically characteristic but through its perspective we may observe the state of the Romanian Insurance Market at regional level. Facing the lack of any recent and eloquent figures the figures published consist into a real image of the territorial side of the insurance market.
Independent of any analyzed indicators, the insurance market in Romania hasn’t achieved its maximum state of development. The fact that year by year we witness constant increase of the insurance market indicators (mostly the value of GWP) shows that the market still has a lot of potential. The maximum level of the market will be recorded only after the first decrease of the GWP will be recorded, fact that we hope to happen not too soon.
