Astra: Insurance Market Decline Could Slow Down By Yearend

05.20.2011 ZF English

Insurers are likely to partially recoup in the second half of the year the business they lost in the first quarter, when overall turnover dropped by 150 million lei (EUR36.4 milion) amid the tightening competition on the auto liability segment, says Radu Mustatea, chairman of Astra, the largest company on the Romanian insurance market.

"The insurance market could recover part of the decline by yearend as the economy is picking up and, moreover, the impact of auto liability policy prices is largely felt in the first quarter, as a big part of car owners renew their policy in this period," Mustatea said.

He puts the auto liability insurance tariff cut during the winter campaign at 20%-25%, with 1.8 million drivers having renewed their policies, which has seriously reduced the volume of gross underwritten premiums, considering this segment accounts for one third of the general insurance market.

Gross underwritten premiums fell by 6.6% in January-March 2011 from a year ago, to RON2.1 billion (around EUR 500 million). Auto liability insurance policy revenues shrank by 18% during the same period to RON668 million (EUR158 million).

While car policy revenues plunged in the first quarter, insurers managed to boost their revenues on other business lines, such as fire or natural disaster insurance and life insurance policies. (EUR1=RON4.1254)