Romanian Life Insurance Market
Trends for 2008
Bram BoonHead of Life Insurance Working Group, UNSAR
February 11th 2007CFA Forecast Dinner Bucharest
Last Year in Numbers
42 Insurance Companies registered by the Insurance Supervisory Commission (end of 2007)
23 Ins. Co. members of UNSAR (~ 95% of the market)
~ 400 Romanian Insurance BrokersForeign capital of the Insurance Companies ~ 90% (big international players)
Total GWP ~ 2 Billion Euro (estimation for 2007) Non-life insurance ~ 81%
motor insurance more than 50% from total GWP & increasing the loss ratio
Life insurance ~ 19% Penetration % GDP ~ 1.75 %Insurance density ~ 92 Euro/capita
The Life Insurance Market Marked by the Launch of the Pension System
Substantial differentiation of product range as result of private pension launch
Life insurance market reported a good increase, but nevertheless under the evolution of non-life market
First year of the EU accession: 10 companies notified CSA of their intention to conduct life insurance activities in Romania, based on the free circulation of services
Life Insurance Market Consolidation in 2007
In 2007 it became more clear the consolidation of the life insurance market
4 important acquisitions took place: Vienna Insurance Group acquired 98.5% of Asirom Groupama acquired BT Asigurari PPF Investments acquired Ardaf and RAI Asigurari
Uniqa took control of the majority share capital from Astra Life percentage in total insurance market decreased from 23% in 2005 to 19% in 2007The life insurance market registered a growth below the growth pace of the non-life insurance => life insurance was sold with less effort, but focus was on P2Competition increased; lower differences in market share between competitors as all life insurance companies took advantage of the Pension reform
General Trends for Life Insurance in 2008
Demand for life insurance will be fuelled by Economic performance and capital inflow EU accession impact Changes in the legal, social and corporate sphere: begin
of development of the employee benefits market
Gradually evolution from consumption driven society to savings oriented
Life insurance to reach close to 3 billion lei by the end of 2010
Life insurance share on the insurance market to reach 25% by 2010
2008 – The Year of Life Insurance and Voluntary Pensions
2008 will be the year of the Voluntary Pensions and Life Insurance Growth in income and development of
middle class Beginning of transfer of social
responsibility in the private sector: private pensions, health system, education
Private pensions to increase awareness on life insurance
Traditional
life
Unit
linked
Pension
fundsMutual
funds
Single
premium
Term
life
Next step: retirement services
Benefits of the Multi-pillar SystemHelps individuals to become self-reliant in old ageReduces financial liability for governmentsRelieves financial obligations for younger generationsShifts responsibility from the state to employers and employees Acceleration of economic growthBoost of the local capital market
22
28
10 63 57
0
10
20
30
40
50
60
70
Assets2002
Regularassetgrowth
Inflowworkers
Outflowretired
Growthdue toextra
funding
Assets2015
Source: BCG Research & ING
Global life and pension assets growth 2002-2015
USD trillion
Romania
Customer Trends for 2008
Increase education and awareness
Change of mentality as result of increasing level of debt amounts
Exodus of the workforce to put pressure on the social system and determine people to become more responsible for financial planning
People will learn not to rely anymore on the moral and financial support of their families
Parents more open-minded and willing to invest in the future of their children
Thank you!
Top Related