General insurance premiums rose by RON7.5 million to almost RON2.17 billion (almost EUR500 million) in the first quarter, according to Insurance Supervisory Commission (CSA) data. Even though the increase is insignificant, the first three months of the year showed a reversal of the downward trend the market had followed for three years.
The uncertainty surrounding the performance of the economy is no reason for insurers to be optimistic, but they hope to see the market stagnate at least. “Even though the market can still feel the pressure of the uncertainty in the economy, we can estimate gross written premiums to remain at the same level as in 2011,” says Constantin Buzoianu, chairman of the insurance market watchdog.
Omniasig’s chairman Mihai Tecau believes 2012 will be yet another difficult year for the insurance industry and says insurers should not even consider two-digit growth. The insurance market fell by 4.3% to RON7.95 billion in 2011.
“It will be a difficult year, which might come with a slight increase in written premiums. The insurance market has a high potential because of the low penetration rate of insurance among consumers,” Tecau said.
The decline of the market in recent years has been largely due to the rate cuts by insurers even though the number of customers did not go down. The price war is still on, which does not leave much room for optimism on the market.
Whereas last year the insurance industry declined because of the low auto liability policy rates, now the price war is being fought over home insurance. Home insurance premiums therefore went down by one third in the first three months even though the number of policies in March was almost double the same time in 2011.
(English version by Loredana Fratila-Cristescu)