Loading ...Romanian insurance companies in 2007 had to rely more on their capacity to pay out claims than on re-insurers, as premiums assigned for reinsurance decreased their weight from 2006, reveal data in a 2007 report of the Insurance Supervision Commission (CSA).
On the segment of non-specific insurance, making up 80% of the market, the weight of premiums assigned for reinsurance decreased from 32.04% in 2006 to 29.38% in 2007. Out of the total of gross premiums underwritten, of more than 1.71 billion euros, more than 504 million euros were assigned to re-insurers. On the life assurance segment, the weight of reinsurance went slightly up from 2.47% to 2.93%.
Reinsurance is the transfer of part of a risk covered by the insurers to a reinsurance company, whereby re-insurers become insurers of the insurance companies.
“An explanation for the decrease in the weight of the reinsurance might be the fact that insurers focused more on capitalisation and less on reinsuring,” managing partner of EOS Risq insurance and reinsurance brokerage Bogdan Andriescu, who is also chairman of the National Union of Insurance Brokerage and Consulting Companies of Romania (UNSICAR), told dialy Ziarul financiar on October 7.
According to CSA, 24 insurance companies increased their share capital in 2007, which is more than half of the market players, with the value of the newly injected capital standing at 166 million euros. As of end-2007, the total paid up share capital of insurers was standing at close to 590 million euros.
Andriescu believes that insurers have been stricter this year as far as reinsurance was concerned, because shareholders wanted profit, and increased reinsurance assignments. “I reckon the weight will exceed 30%, particularly as far as financial risks are concerned, because the latest financial earthquake has made insurers realise what could happen,” he says.
The CSA report indicates that 12 companies in 2007 were assigned reinsurance risks from local insurers. As regards non-specific insurance, some 44% of the premiums assigned related to CASCO motor insurance, 22 to insurance against fire and natural disasters and 13% to credit insurance. On the life assurance segment, 90% of the premiums assigned related to standard and annuity-paying policies.
The total of premiums assigned for reinsurance plus non-specific and life insurance gave 517 million euros in 2007, up 22% from 2006.
The total of premiums assigned for reinsurance plus non-specific and life insurance gave 517 million euros in 2007, up 22% from 2006.
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