The brokerage market posted profit and growth of revenue constantly during the crisis unlike the insurance companies, which posted RON3 billion losses in the last eight years. Their losses hit a record high of RON1.3 billion last year alone.
According to ASF data, 339 brokers cumulated RON130 million profit, while another 125 posted RON16 million loss.
The brokerage firms affiliated to banks, leasing companies and car dealers saw the highest profit margins. For instance, the insurance broker of Porsche Finance, which is connected to the Porsche group that sells some of the most popular car brands like Volkswagen, Skoda and Audi made RON17 million profit and RON23 million revenue, which means 74% profit margin.
“In-house brokers (affiliated to leasing companies, car dealers or banks i.e.) don’t have too high running costs, which allows them to post high profit margins. Such brokers get their business via the company they are part of and most policies they broker are comprehensive car policies,” explained Valentin Tuca, chief executive officer of insurance broker AON, one of the largest on the market specializing on the corporate segment.
UniCredit, the in-house broker of the group by the same name posted the highest profit, almost RON20 million. The group owns the largest leasing company on the market and UniCredit Broker’s profit margin stood at almost 70%.
RCI, the broker affiliated to RCI Leasing, which funds purchase of Dacia and Renault vehicles, too, posted a higher than average profit margin, 67%. RCI Broker’s profit amounted to RON14 million, while revenue was 21 million.
On the other hand, the most visible brokers on the market in terms of volume of premiums brokered were not also the most profitable. For instance, Safety, the largest broker, posted RON2.1 million profit and about RON45 million revenue, while the volume of premiums brokered stood at RON243 million. Its profit margin therefore was 4.5%.
Marsh, the largest broker on the corporate segment, did not come close to the profit margins of the in-house brokers of car dealers, leasing companies or banks, either. Its 2013 profit was RON5 million, while revenue reached RON32 million. Most brokers on the market actually saw single-digit profit margins last year.
While insurer revenue dwindled during the crisis, brokers’ revenue went up by as much as 20% a year at times. Last year, however, their revenue growth slowed down due to the decline in the fees collected from insurers. Last year’s increase stood at only 6.5% compared with 2012, which translated into RON773 million revenue for the insurance brokers. Brokers live mostly (over 90%) off the fees insurers pay them, with the average fee now at 18%.
(English version by Loredana Fratila-Cristescu)