Brokerages in 1Q generated income from the negotiation of insurance contracts worth 202 million lei (EUR46 million) and handled premiums worth RON1.1 billion (EUR250 million), meaning an 18% average fee. By comparison, the average fee stood at 20% in the same period of last year.
“There’s a downward trend of the average fee, particularly for civil auto liability policies (RCA), where we can also see a tariff increase. The trend will maintain, but we will not witness a major decline during the year. On average, fees stand at 17-18% for RCA,” stated Viorel Vasile, managing partner at Safety Broker.
The average fee decline comes after brokers had in the past years been in the position of negotiating more tightly the level of fees with insurers, so that the weight of fee income had climbed by four percentage points during the 2010-2013 period.
Fees are the main source of income for brokerages, but they also generate revenue from connected activities, but the weight of such income is very little in total revenue.
The presence of brokers on the insurance market has strengthened in recent years on insurers’ decision to slash costs by reducing the number of subsidiaries and their own sales force.
Thus, brokers came to sell 55% of policies issued by insurers during the January-March period, up 8 percentage points compared with last year.
(English version by Catalina Apostoiu)