2019 – 2021: Positive trend for the Romanian insurance market despite all challenges

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Romanian insurance market maintained an upward trend throughout years despite the challenges raised by the Covid19 pandemics. Reporting a 5.6% growth rate in 2019, insurers ended the first year of the pandemic crisis with a 4.6% yoy increase in the total GWP.

The first half of 2021 ended with +11.66%, while the preliminary results for the full year 2021 just released by the market supervising authority (ASF) show an impressive 24% growth rate in comparison with 2020. The new edition of XPRIMM’s report “Insurance Profile Romania FY2019FY20201H2021” is now available to all those interested by the evolution of the Romanian insurance sector.

Some of the main findings of the report:

  • Motor insurance is still leading. In all reporting periods analyzed, most of the market growth, in absolute terms, came from the motor insurance lines. Otherwise, health insurance and suretyship insurance saw increasingly high growth rates, their share in the market portfolio improving although remaining low.
  • Claims on motor insurance keep growing. Motor lines have also been responsible for most of the increase in paid claims. Despite the falling number of claim files in 2020 result of the travel restrictions imposed by the pandemic the average values of the motor insurance claims kept going up, the total claims expenses on the motor insurance classes remaining almost unchanged.
  • Combined loss ratio remains over 100%. Between 2019 and 2020 the average MTPL premium’s value slightly decreased, from EUR 133.7 to EUR 129, while the average paid claim increased from EUR 1,756.7 to EUR 1,849.3. However, the loss ratio improved and, consequently, the combined ratio also improved, although it remained over 100%.
  • Brokers` role increases. Insurance brokers’ contribution to the market GWP formation increased to 68.38% in 2020. More than half of the total mediated GWP in 2020 (50.68%) were for MTPL insurance, insurance brokers representing, in fact, not only the main distribution channel for this type of insurance products, but almost an exclusive one (96.7% of the MTPL GWP).
  • Managing CITY Insurance`s fall down. Although it has experienced the biggest failure in its modern history with the bankruptcy of CITY Insurance, both market players and the supervisory authority reacted very rational, the entire absorbing process going better than expected.

The full report online is available here.

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