Five companies control half of the insurance market

BALANCE SHEET For the first half of 2014, insurance companies in Romania subscribed life and non-life policies totaling over 4 billion lei.

The market continues to shrink, thus confirming the already established descending trend. Still, experts in this field claim that the mere fact that the foreign insurance companies didn’t head for the hills yet shows that we’re witnessing a rather supposed decline, as much of the amounts are collected by the reinsurance firms.

At this moment, five companies control almost half of the market, while the ten largest companies account for 80% of the market, according to the Financial Supervisory Authority.

Follow the leaders

Well established companies meet the controversial ones atop the list of the largest Romanian insurers. With a 12.37% market share, Allianz-Tiriac leads the way, followed by the insolvent Astra, with a 10.14% market share.

For the first semester of 2014, insurance companies in Romania subscribed gross policies amounting 3.97 billion lei, down 6.8% from the same period last year. This slump reflects on the contribution of the insurance market in the country’s GDP – a discouraging indicator, given that we were already trailing the other CEE countries in this respect.

For the first six months of the year, insurance penetration (calculated as the ratio of the percentage of total insurance premiums to gross domestic product) reached a mere 1.42% level, down from 1.61% last year. By June this year, there were 37 active players in the field – 20 general insurance companies, 9 life insurance-only companies and 8 providing both insurance types. The ten most powerful companies account for 80% of the market, both on the general insurance segment and the life segment.

Most companies report negative balance sheets – 21 of them, more precisely – while 16 were profitable. Profits, on the other hand, are getting slimmer and slimmer, reaching a total amount of a meagre 164.91 million lei, down 14.7% from last year. To be fair, the losses are getting thinner as well, with a total of 219.16 million lei, down 9.39% from last year.

The monopolizing trend affects brokers’ market as well: less than 10% of all brokers control over 70% of the entire market. According to the data published by the Financial Supervisory Authority after consulting 448 of the 594 licensed brokers, the first 50 companies amounted for 73.76% of the revenues reported from the brokerage activity. The aggregate value of gross assets of all brokers was 527.37 million lei, up 1.20% from last year.