Romanian insurers' shareholders will keep bringing more money in 2010
In the context in which Romania has the most unprofitable segment of general insurance in South-Eastern Europe, and the market will also end 2009 at a loss, the shareholders of the Romanian insurers will also operate this year additional infusions of capital to finance their activity. Their value is estimated by specialists at a similar level as the one from 2009. Last year, capital contributions made to handle the losses caused by the financial crisis amounted to nearly EUR 350 million, and market capitalization reached more than EUR 1 billion.
Representatives of the insurers estimated since the beginning of 2009 that the market would need massive capital infusions, of up to EUR 300 million, so that companies could fall within the margin of solvency, in the context of significant losses registered by insurers in 2008 and of unfavorable economic conditions, following the installation of the financial crisis.
"Last year, 16 insurance companies have conducted capital increases in order to develop their activity. The contribution of the shareholders of these insurers had a total value that has exceeded RON 536 million, that is more than EUR 127 million", recently announced the Insurance Supervisory Commission.
This amount does not include the capital injections made by GROUPAMA for finalizing the merger process of the three companies it owns on the profile market in Romania - BT Asigurari, ASIBAN and OTP Garancia.
The French group has made the largest investment in the insurance market in Romania, GROUPAMA paying EUR 450 million for the taking-over of the three companies, but later it invested both in the merger process, and to cover the losses accumulated by them. Last year, the Romanian businesses of the French have decreased by 11%, to a volume of underwritings of EUR 209 million, on the background of adverse evolutions in the economic environment and of the measures to restructure the portfolio.
In 2009, capital increases were made for the liquidity and solvency of insurance companies to persist over the limits stipulated by the regulations in force, according to ISC.
Also, early this year, there were warnings in the market that companies needed additional capital contributions, to cope with significant losses of last year, especially on the non-life segment.
So, since the beginning of the year, four insurance companies have received capital contributions from shareholders: ARDAF, BCR Asigurari, GROUPAMA Asigurari and EUROINS Romania. At the same time, CERTASIG shareholders debated on the 8th of March on a program to increase the share capital of the insurer with EUR 5 million, in a period of five years the most.
According to a recent report by CEIOPS, quoted by the President of UNSAR, Cristian CONSTANTIENSCU, Romania has the most unprofitable segment of general insurance in South-Eastern Europe, the margin of technical results already entering on a negative trend. Thus, the evolution of the technical result on general insurance in the last four years looks like this: in 2005 was it -30 million EUR, in 2006, -275 million EUR, in 2007, -115 million EUR, in 2008, -236 million EUR, in 2009 being expected an even greater value of this indicator.
Author: Andreea IONETE
on 10.03.2010
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