“We want to reduce the non-profitable auto insurance business, especially the auto liability insurance, which is why we raised the rates of such policies. This will show in the financial results of this year,” Diaconescu said.
The company underwrote 403 million lei (EUR90.5 million) premiums in January-September 10% below the level in the same time of last year. It recorded its biggest decline on the general insurance segment, 15%, while life insurance saw 2% decline. General insurance generates more than 80% Asirom’s revenue.
Auto liability insurance premiums fell by about 19% in the first nine months, to RON151 million, from about EUR187 million in the year-ago period.
The insurer raised the auto liability insurance rates so the average premium now stands at RON650. Gross comprehensive auto insurance premiums written fell by 6% to RON95 million in January-September.
Average auto insurance (either liability or comprehensive) claim settled stands at RON5,000 and the claims rate of such policies went up by more than 15% in the first nine months of the year. The insurer settled RON168 million in auto liability insurance claims and RON96 million in comprehensive insurance claims.
Although Asirom had expected gross written premiums to go up to close to the 2011 level at the beginning of the year, the macroeconomic trends and the changes of the property insurance legislation made it revise its estimates towards flat premiums. It now expects life insurance to perform better, which generates merely 17% of its revenue.
“In the second half of last year we renewed our entire life insurance portfolio with a stronger focus on traditional products. We also sell products with a savings component but their share of the total is lower, because we started selling such products not so long ago (two years ago i.e.). We’ll keep selling a life insurance product mix,” Diaconescu says.
Asirom’s chairperson also says that the insurer is pursing an improvement in portfolio quality especially on the non-auto insurance segment.
Mariana Diaconescu says the insurer is involved in a number of projects started by the National Association of Insurance and Reinsurance Companies in Romania (UNSAR) largely for the regulation of the auto insurance policies.
The Asirom representative does not expect significant increases in the gross written premiums on the entire market this year, and sees business rather flat or up about 1% at best.
The insurer continued its restructuring, laying off about 200 people this year so it is now operating with 1,000-1,100 employees.
In 2012, Asirom conducted the most extensive restructuring process in its industry, laying off about one fifth of its employees, according to Trade Registry data.
(English version by Loredana Fratila-Cristescu)