Romania Insurance Report Q2 2016
BMI View: We hold a broadly positive outlook for Romania's insurance market. Although the life sector isin the early stages of development, with low rates of penetration and density, a gradual improvement inhousehold income rates and employment rates will improve the affordability of various life products, whiledemographic trends will increase demand. The non-life sector is more established, though largelydominated by basic motor and property lines. Again, economic growth and the rise in average householdincome will support growth in the non-life sector. This growth could attract more foreign investment to thesmall Romanian market, though some regulatory uncertainty could deter potential investors.Latest Updates And Developments
Regulatory oversight and transparency in the market have come under criticism in Romania following thebankruptcy of leading domestic firm Astra in late 2015 and arrest of Dan Adamescu, who has beencharged with abuse of office, money laundering, and complicity to abuse of office by publicofficials. Another insurance firm, Carpatica Asig, is also under investigation for fraudulent financialreports.
Meanwhile, the Financial Supervisory Authority (ASF) has given several major insurers, includingGenerali, Groupama, Allianz-Tiriac, Asirom, Omniasig, Uniqa, and Euroins 30 days to rectifyirregularities relating to the way firms calculate premiums for compulsory motor insurance.
Despite these concerns, we are forecasting steady growth in motor insurance premiums, as new vehiclessales grow strongly and insurers improve cost controls between 2016 and 2020. This underpins ourforecasts for growth in the overall non-life sector, with premiums forecast to reach USD1.9bn in 2020, upfrom USD1.4bn in 2016.
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