It also said Romania is the most difficult market for VIG, mainly due to price dumping strategies.
“Performance continues to be less satisfying in Romania, where we are refusing to take part in price dumping in the area of motor vehicle insurance. Not only that, we have also actively applied extensive measures to effect a turnaround in Romania,” Peter Hagen, Chairman of VIG’s Managing Board, said in a report released Thursday.
In Romania, VIG controls insurers Omniasig, Asirom and BCR Asigurari de Viata.
Omniasig, Asirom and BCR Asigurari de Viata underwrote gross premiums of EUR196.3 million in the first half of 2013, down 16.8% from EUR235.9 million in the year-earlier period. Their combined loss widened to EUR17.9 million from EUR5.8 million.
“The Romanian insurance market continues to be affected by intensive price competition. Due to the risk/return-oriented price policy for restructuring the portfolio, the non-life segment recorded a decrease of 16.4% in premiums written to EUR154.1 million. Premiums written in life insurance declined by 18.0% in the first half of 2013 to EUR42.3 million,” according to the report.
VIG recently said it conducted a goodwill impairment test targeting its Romanian operations, which resulted in an impairment of EUR75 million on the general insurance segment.
VIG underwrote gross premiums of EUR5 billion in the first half of 2013, down 4.8% on the year. Its net profit after minority interest fell 39% on the year to EUR140.5 million from EUR231.9 million.
VIG is present in Central and Eastern Europe. Its largest markets are Austria, the Czech Republic, Slovakia, Poland and Romania.