“The analysis conducted by the Competition Council clearly shows the recent decline of the Romanian life insurance industry, a decline most obvious when revenues are expressed in real terms, adjusted for inflation. The low development level of this industry is also highly apparent when compared to other countries in the region, as Romania lags behind,” the institution noted in its report.
The Romanian life insurance market reached RON1.63 billion in 2013, from RON1.8 billion the year before. Life insurance accounted for just 20.12% of the overall insurance market in 2013, from 21.28% in 2012, and the industry’s share in the country’s gross domestic product dropped to 0.26% in 2013 from 0.30% in 2012. The rate is expected to drop to 0.25% of GDP in 2014.
The density of life insurance in ratio to the population dropped from EUR21.07 per capita in 2012 to EUR18.54 per capita in 2013 and the antitrust body estimates it will drop to EUR17.22 per capita this year.
The number of life insurance companies also declined in recent years, from 24 companies in 2009 to just 16 at present, or 18 if local branches of foreign insurers are considered. One more insurer, France’s AXA, is set to exit the Romanian market in the near future.
“Even if the number of insurers on the market is not very low, recent developments are worrisome,” the institution noted.
The institution also noted the level of life insurance revenue in Romania, of 20.12% of the overall insurance market, is very low compared to the European average of nearly 58%.