Loading ...Romanian insurers’ solvency ratios are not worrying for now, says the Insurance Supervision Commission (CSA).
The risks facing Romanian companies in the context of the ongoing world financial crisis regard diminishing return on investment rates derived from invested premiums and possibly panic among customers, who might terminate insurance agreements.
The risks facing Romanian companies in the context of the ongoing world financial crisis regard diminishing return on investment rates derived from invested premiums and possibly panic among customers, who might terminate insurance agreements.
Other problems likely to arise, according to daily Ziarul financiar, would be generated by increasing industrial losses as a result of under-valuation of risks covered under Caasco and RCA motor insurance policies and rising acquisition prices.
Findings of a recent CSA report indicates that the value of the profit margin available to insurance companies in late 2007 was RON 1.61 billion (some 482.42 million euros) for general insurance and RON 666.68 million (some 199.76 million euros) for life insurance.
Findings of a recent CSA report indicates that the value of the profit margin available to insurance companies in late 2007 was RON 1.61 billion (some 482.42 million euros) for general insurance and RON 666.68 million (some 199.76 million euros) for life insurance.
Average solvency ratios of the companies having done business in 2007 was 2.38, as far as general insurance was concerned, and 3.85, as far as life insurance was concerned. Under the current regulations, the minimum solvency ratio required from Romanian insurers is 1.
Yet, in order to meet the liquidity and solvency requirements, 24 companies had to increase their share capital in 2007, a number the equaled the one of companies having reported losses.
Yet, in order to meet the liquidity and solvency requirements, 24 companies had to increase their share capital in 2007, a number the equaled the one of companies having reported losses.
Romanian insurers say they would have to hike by 40% the price for mandatory motor insurance policies (RCA) for 2009 because of the developments in the claims they have to pay, and franchise out Casco insurance policies, says head of the Generali Romania motor insurance department Radu Ionescu.
He also says that 2008 will probably be the third consecutive year in which Romanian insurers will record losses. “The value of claims has outgrown gross premiums underwritten in the past two years,” Ionescu explains.
He also says that 2008 will probably be the third consecutive year in which Romanian insurers will record losses. “The value of claims has outgrown gross premiums underwritten in the past two years,” Ionescu explains.
Most of the claims paid by insurers in 2007 in Romania, or 60%, related to motor insurance, reveals a study by Generali.
In 2007, 24 insurance companies reported losses, up from 21 one year before, with their total losses standing at RON 416.02 million (some 124.65 million euros), up 70.5% from 2006.
On the other hand, the companies’ acquisition costs stood at RON 1.33 billion (some 398.52 million euros), up 33.78% from the year before.
H1 2008 net revenues of the insurance companies were RON 15.66 million (some 4.27 million euros).
In 2007, 24 insurance companies reported losses, up from 21 one year before, with their total losses standing at RON 416.02 million (some 124.65 million euros), up 70.5% from 2006.
On the other hand, the companies’ acquisition costs stood at RON 1.33 billion (some 398.52 million euros), up 33.78% from the year before.
H1 2008 net revenues of the insurance companies were RON 15.66 million (some 4.27 million euros).
In Romania, there is a Guarantee Fund set in place for the insurance and the reinsurance business, similar to the one for the banking institution, which main aim is to protect the insured against bankruptcy or insolvency of insurers. The fund is moneyed by contributions from all insurance companies and it is administrated by the CSA.
In 2007, the due of each company was set by CSA at 0.8% of the premiums underwritten, in the case of general insurance, and at 0.3% of the volume in the case of life insurance.
Since its inception, the fund has paid out compensations for the bankruptcy of three insurers: Croma, Grup As and Metropol CIAR. Data with the CSA indicated that the Guarantee Fund’s total revenues as of end-207 were standing at RON 321.77 million (some 96.41 million euros).
Since its inception, the fund has paid out compensations for the bankruptcy of three insurers: Croma, Grup As and Metropol CIAR. Data with the CSA indicated that the Guarantee Fund’s total revenues as of end-207 were standing at RON 321.77 million (some 96.41 million euros).
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