The event was organized by ZF in partnership with Ergo, Generali and Metropolitan Life.
“Signals from the insurance market show stability. A challenge for insurers is growing the optional insurance portfolio and retaining and gaining clients must be done through the quality of services, not through prices,” said Cornel Coca Constantinescu, vice-president in charge of insurance with Romania’s Financial Supervisory Authority (ASF).
“We must use the mandatory insurance market as a way to drive growth of optional insurance. We all want to grow. The important thing is to have healthy growth. I believe in healthy growth on medium-term rather than spectacular growth on short-term.”
Optional insurance has been unable to live up to its highly touted potential for more than twenty years. However, the first half of this year brought hope about steady growth in the future.
The gross written premiums in optional comprehensive and property insurance, the main types of optional insurance, stood at 35% of the entire market at the end of the first half, much less than 53% auto liability insurance policies account for. Life insurance policies account for even less, about 20%.
Insurers are essential for stimulating the sales of optional insurance, in that they must create products that clients are confident to buy.
The big challenge insurers are facing, says Aurel Badea, member of the board of Allianz-Tiriac, one of the leading insurers on the market, is rethinking products and adjusting them to the current conditions on the market.
Once products improved, brokers could be the main vector for an increase in sales. They are selling mostly auto liability insurance at the moment, but the latest legislative changes and the downward trend of the fees they get from such sales are making them look at other lines of business more carefully and a first step is health insurance. Optional home insurance might follow.
“Brokers are the main growth vector for insurance in general and for optional insurance in particular. This is a trend that can be improved. (…) In Romania we are used to having insurance as a mandatory thing and buy it for that reason, and I don’t mean just auto liability here, but also having to take insurance when one takes out a loan, a car in leasing,” said Tudor Grecu, partner Audit&Assurance with KPMG.
“I have always supported brokers’ actions towards offering optional insurance. Brokers are trying to balance their portfolio with more optional insurance types.”
On the other hand, Adrian Marian, chairman of the insurers’ association UNSAR, believes actors on the market need to look at the challenges growing the market faces and find solutions together with their stakeholders.
Sales of comprehensive car insurance and property insurance policies stood at 1.4 billion lei (EUR302 million) in the first half, up about 7% on the year-ago period, according to ASF data. This growth pace is not fast enough, considering the Romanians’ insurance needs.
On the other hand, life and health insurance policies were the pleasant surprise of the local market in the first half. Gross written premiums on the life insurance segment saw the highest growth in years, 36%, while health insurance saw about 70% growth, according to ASF data.
“Lending and related insurance witnessed significant growth, investment and savings products sold through banks resumed growth, as well,” said Mihai Popescu, chief executive of Ergo Asigurari de Viata, trying to explain the growth of the market.
Life and health insurance are poised for sound growth over the coming period, said Vlad Antoniu commercial director of Ergo.
(English version by Loredana Fratila-Cristescu)