Romanian Insurance Mkt Seen Declining At Least 5% This Year

The Romanian insurance market will decline at least 5% this year, in an optimistic scenario, as the number of civil liability car insurance policies and their prices will drop 20%, said Tuesday Cristian Constantinescu, head of the Romanian union of insurance and reinsurance companies.

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"At the end of 2010, I was expecting stagnation in underwritten premiums for this year but recent developments on the market make me less optimistic. In a pessimistic scenario, my expectations for this year point to a 10% decline of the insurance market. In an optimistic scenario, the market will decline just 5%," Constantinescu said.

In turn, the chairman of the board of insurer Astra, Radu Mustatea, said the effects of the economic crisis will be truly felt in the insurance market this year.

"Underwritings will see a double digit decline, due to lower revenues from car insurance where the decline will be sharper," he said.

Car insurance policies account for more than half the Romanian insurance market.

The head of insurer Allianz-Tiriac, Rangam Bir, said he is pessimistic about the evolution of underwritten premiums in 2011, which, in the best case scenario, will stagnate or post a slight decrease.

"With no support from leasing or lending, the car insurance segment will drag the market down this year as well," Bir said.

The general manager of insurer Euroins, Alin Bucsa, said he expects the insurance market to decline at least 10% this year, or even as much as 15% in a more pessimistic scenario.

"There is a lag between economic growth and the growth of the insurance market. The potential growth of the GDP will be apparent on the insurance market in six to twelve months," Bucsa said.

The head of Uniqa Asigurari, Oliviu Stoica, said he also expects the Romanian insurance market to decline 10-15% this year.

According to the insurance regulator CSA, Romania's insurance market declined 5.1% in the first three quarters of 2010, to 6.32 billion lei (EUR1=RON4.2549), as general insurance declined 6.8%, to RON5.1 billion and life insurance increased 2.9%, to RON1.22 billion.

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