Fin Crisis To Lower Romanian Insurers’ Pft Margins – CFA Romania

"Romania, an emerging market, will gain the characteristics of developed markets, where growth rates are lower. Insurers can no longer expect high profit margins as they had five-six years ago, and this outlook isn’t very positive, especially for the general insurance segment,” Cabat said during an event on insurance organized by Media XPrimm.

CFA Romania is the association of professionals in investments designated Chartered Financial Analyst (CFA) by the American CFA Institute. The Institute has 135 member societies worldwide.

According to the Romanian insurance regulator, CSA, the local insurance mare reported net loss in 2006 and 2007, of 68.529 million lei (EUR1=RON4.2917) and RON253.2 million, respectively.

Cabat estimates the year 2009 will be difficult for Romania and the outlook is not very positive for 2010 either.

"If the financial crisis in the United States ends in December 2009, in Romania it will end in another year or more. This is the gap. The gap between the U.S. and the European Union is of 3-4 months, and the gap between the European area and Romania is of 4-6 months," Cabat said.

Also attending the event, Dumitru Ceraceanu, former president of insurer Asiban, said insurers, hit by the financial crisis, will be forced to adapt policies to new economic realities and will focus more on marketing and sales.

"It’s clear to everybody that competition will intensify as the number of potential clients lowers. Also, part of the measures managers will take will target the reduction of administrative costs. Moreover, the relation with brokers will have different coordinates, because the current sales force of insurance companies isn’t ready to take on the crisis,” Ceraceanu said.