Insurance market amounted to 724 million lei in 2007

    After an increase by 29.5% the Moldovan insurance market has reached a level of 724.2 million lei in 2007, beyond expectations of experts who estimated that the insurance market could amount to 700 million lei in 2007 and go over one billion lei in 2008 if the market maintained its growth rates of the previous years. Although in 2007 the market has grown more than in 2006 reaching a growth rate of 35.3%, the trend remains the same and managers of insurance companies are optimistic about their business development. The market has an ascending dynamics.

 Insurance market evolution in 2003-2007 (million lei)

2003     289.8

2004     379.0

2005     413.3

2006     558.9

2007     724.2

 

    With a more than average growth voluntary property insurance and voluntary civil liability insurance have pushed the insurance market forward. Voluntary property insurance value upped by 46.9% to reach 263 million lei, and voluntary personal insurance – by 43% reaching 93.2 million lei. Mandatory auto insurance value made up 155.3 million lei last year (+11%). It has been a very good year for farming property insurance (3.5 times more), financial risk insurance (2.4 times more), private property insurance (1.9 times more) and life insurance (increase by 54.8%), although in absolute value they yield to other branches and still remain a very undeveloped segment of the market. Life insurance value made up 33.6 million lei in 2007. International Green Card insurance makes up a significant portion of the market; last year it has exceeded 130 million lei (+27.4% as against the previous year).

 Top growth / dynamics:

* farming property – 3.5 times;

* financial risks – 2.4 times;

* private property – 1.9 times;

* death – 72.2%;

* health – 58.3%;

* life – 54.8%;

* auto CASCO – 41.58%;

* Green Card – 27.4%.

 By estimates of experts in the field:

- over 60% of the market are constituted by auto insurance (similarly to neighboring countries);

- life and health insurance amounted to 12.9% of the total premiums underwritten.

 

“More than certainly the market will continue to develop at high rates”, insurers say.

 

There have been several factors that have moved these segments of insurance market forward:

 

- the severe drought of 2007 caused farmers to insure their property and harvest, also due to state subsidy;

 

- foreign problems of companies generated by ceased export and difficulties they have faced in repatriation of funds caused them to insure financial risks;

 

- more frequent use of CASCO auto insurance was due to an increase in sales of new cars, especially in leasing. Insurance of one’s own car damage became a compulsory condition of leasing contract conclusion. With lease contracts becoming more and more popular a strong increase in this market segment is imminent. Moreover, besides conclusion of new contracts old contracts are renewed;

 

- health and life insurance growth was mainly caused by aggressive sale and marketing policies promoted by Grawe Asigurare de Viata S.A.;

 

- health insurance volume increased due to the fact that visas to Romania became mandatory since 01.01.2007 and, respectively, medical insurance abroad became essential;

 

- Green Card insurance volume went up due to increased travel insurance fees for trips to Romania (becoming equivalent to those applicable for trips to other EU countries);

 

- uncertainty about property safety determines more and more people to insure their property.

 

Paid indemnities made up 235.3 million lei – a 23.2% growth as against 57.4% in 2006. “Indemnity growth rate exceeded premium underwritten growth rate, unlike in 2004-2006, a period characterized by an opposite tendency”, specialists state.

 

Top indemnities:

 

* CASCO car insurance – 53.3 million lei

* Mandatory Auto Insurance – 48.28 million lei

* Green Card Insurance – 28.3 million lei

* insurance of property other than vehicle – 44.5 million lei

 

The highest growth of indemnities has been achieved in farming property insurance (44 times), private property insurance (by 47.8%) and health insurance (by 46.5%). Indemnity growth rate in case of MTPL was higher (+30.9%) than premium underwritten growth rate (+10.8%), and in case of CASCO insurance it made up 48.6% and 41.58%, correspondingly.

 

On the other hand,

 

- the amount of indemnities for financial risks has decreased (-2.8%) as against a 2.4 times increase in premiums;

 

- the amount of indemnities for life insurance has decreased by 16.0% along with a 54.8% growth of the amount of premiums underwritten;

 

- damages paid for health insurance have increased less (+46.5%) than premiums underwritten (+58.3%);

 

- indemnities for Green Card insurance have decreased by 23% as against a 27.4% growth of premiums.

 

33 insurance companies carried out their activity in 2007. Although many of them are still of inferior quality insurance companies are consolidating and their assets are growing continuously, having doubled within the last three years. Total assets have increased from 445 million lei in 2004 to 841.2 million in 2006 and, respectively, exceeded 1 billion lei in 2007, as against slower growth of paid-up capital up to 207 million lei. 15 out of 33 companies possessed capital over 4 million lei.

 

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