MUNICH Re: The largest reinsurance demand in Romania will emerge from PAID
 Negotiations for the renewal of reinsurance contracts, which are beginning this week in Baden-Baden, must not be neglected, given the increases of the reinsurance premiums for primary insurers in Eastern Europe, including Romania.
Thus, both the effects of financial crisis on certain classes of insurance, such as professional liability, as well as the motor claims rising will definitely pull up reinsurance rates on these lines of business.
Regarding the demand for reinsurance on the Romanian market, the biggest stake is the reinsurance contract for the Romanian catastrophic risks insurance program.
"In particular for the Romanian market, the establishment of the local Insurance Pool against Natural Disasters (PAID) will need particular consideration in terms of capacity and price", Manfred BRANDMAIER, MUNICH Re Client Manager South Europe, stated for XPRIMM Publications.
"The largest reinsurance demand will certainly emerge from the new Insurance Pool against Natural Disasters, which is just about to be established and which shall become operative with the beginning of next year. In addition, it is expected that this shall also trigger more insurance demand by e.g. owners of flats as their insurance awareness will increase. From our point of view, very challenging will be the future reinsurance of Motor Own Damage and, to a certain extent, Motor Third Party Liability business. Claims experience is very unsatisfactory and signs for improvement so far are not sufficiently noticeable. Hence reinsurance companies will need to analyse very carefully the extent of engagement they will be ready to offer next year", BRANDMAIER completed.
In 2008, the share premiums ceded in reinsurance of the total underwritings reduced from 24.04% to 20.6%, on the general insurance segment going down to 25.3%, from 29% in 2007. Annual growth in the volume of premiums ceded in reinsurance by Romanian insurers fell significantly in the first half of 2009, to 0.35%, compared to the 7.97% in 2007, to RON 1.79 billion.
Significant shares of cedings in reinsurance in general insurance were recorded for: Motor Hull insurance, the volume of RON 956.41 million representing 53.4% of the underwritings last year, up from 43.87% in 2007; fire and allied perils insurance - RON 386.8 million and 21.6%, down from 21.9% the previous year; MTPL insurance, ceded premiums worth RON 134.92 million, or 7.53% of the underwritings, more with 12.3% compared with 2007.
Author: Andreea IONETE
on 22.10.2009
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