The insurance market in Romania is a stable one, characterized by the improvement of the prudential and liquidity indicators, according to the analysis carried out by the Financial Supervisory Authority (ASF) following the reports sent by the insurance companies, a press release informs.
According to the reported data, for the first time, all insurers met the Minimum Capital Requirements (MCR) and the Solvency Capital Requirements (SCR) on June 30, 2017 under the Solvency II regime.
The amount of eligible own funds at the end of the first half of 2017 to cover the MCR minimum capital requirement amounted to RON 4.69 billion at the level of the entire system, while the amount of eligible own funds to cover SCR was RON 4.96 billion.
As regards the liquidity of insurance companies, the ASF analysis reveals that in the first half of 2017, the liquidity ratio calculated for the non-life insurance category is 2.63. At the same time, the liquidity ratio calculated for the life insurance category is 5.03. The two indicators are above par, which indicates a very good level of liquidity of the insurance market.
“The insurance market in Romania has exceeded the moment of imbalances and is today stable, profitable and on a consolidated growth trend. We are moving towards a mature market, with the development potential being considerable. This creates the premises for the services offered to the consumers to be of a high standard,” Cornel Coca Constantinescu, ASF Vice President, stated.
According to the data sent by the insurers on end-June, the off-site supervision analysis found that the largest share in the structure of investments made by insurance companies was held by government securities by 70 percent of the total investments, which denotes a prudent investment policy to invest premiums earned from policyholders.
Among the instruments preferred by insurers were Undertakings for Collective Investment of Transferable Securities (UCITS), the value of which accounted for about 10 percent of the value of investments made at the level of the entire insurance market.
Cash deposits in RON and foreign currency deposits with credit institutions amounted to 834 million lei, representing 7 percent of the total investments, while the amount of investments in shares, which are higher-risk financial instruments, was of only 1 percent.
The insurance market reached, in the first half of 2017, a total of gross written premiums (PBS) of RON 5.04 billion, up by 8 percent compared to the same period of the previous year. At the same time, the net result of the activity in the first half of 2017 was positive, amounting to RON 260.3 million, up by 115 percent compared to the same period last year.