Romanian Insurance Market Overview

Octombrie 2009

CODRUŢ PASCU - Managing Partner IOANA LEAUA - Consultant ROLAND BERGER STRATEGY CONSULTANTS S.R.L.

The Romanian insurance market, with its comparatively low density and penetration rate, exhibits one of the highest development potentials in the European market.

The local insurance market has constantly grown at a rapid pace over the last seven years. In the context of the global financial crisis, though, the market has slowed down significantly in 2008 and is expected to stagnate in 2009. The consolidation process, begun four years ago, will most likely continue in 2009. Companies will be forced to adapt their product portfolio and increase their efficiency in order to react to the changing market environment and remain profitable.

 

Market development

In 2008 gross written premiums increased by only 12%, compared to an average growth pace of 29% between 2002 and 2007. The insurance segment penetration rate remained constant at 1.8%.

• Evolution of insurance premiums volume and penetration rate, 2002-2008

Source: Roland Berger; Insurance Supervisory Commission; National Statistics Institute

Gross written premiums reached EUR 2.4 bn at the end of 2008, an increase of EUR 262 mn compared to the same period of 2007. The market is clearly dominated by the non-life segment, which in 2008 accounted for around 80% of total premiums (EUR 1.9 bn). Both the nonlife and the life segment slowed down their growth significantly, from 32% in 2007 to 12% in 2008 and from 33% to 11%, respectively.

The insurance market cooled down in the third and forth quarters of 2008, as the global economic downturn began to affect Romania. In the first quarter of 2009, the entire market decreased by more than 12% as compared to the same period of 2008, with a drop in the life segment of 18% and a downward adjustment of 11% on the non-life segment.

• Insurance penetration in Romania and selected CEE countries, 2008

Notes: 1) Bubble size represents insurance density (premiums per capita in EUR

2) DE-Germany; HU-Hungary; PL-Poland; SK-Slovakia; CZ- Czech Republic ; HR-Croatia; BG-Bulgaria; SL-Slovenia; RO-Romania

Source: Roland Berger; Swiss Re Sigma report No. 5/2008; National insurance supervisory authorities and statistics offices

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