Romanian insurance market

The top 5 insurance groups generated around 73% of the total premium volume in Romania in the first three quarters of 2020. The two largest insurance groups generated around 40%.

Market growth in the 1ST to 3RD Quarters of 2020 compared to the previous year

Romania – Market growth in the 1st to 3rd quarters of 2020 compared to the previous year (bar chart)

Source: Financial Supervisory Authority ASF

The Romanian insurance market grew in the first nine months of 2020, recording a 4.8% increase in premium volume in local currency terms. This was primarily due to a 6.3% increase in non-life insurance. Life insurance recorded a small decrease (-1.3%).

The non-life sector continues to be strongly dominated by the motor lines of business. Motor third party liability insurance, which accounts for around 45% of the non-life business, recorded year-on-year growth of 4.6%. A small increase was also recorded for motor own damage insurance (+3.0%). The non-motor lines of business also showed an increase of 12.5%.

In the life line of business, unit-linked and index-linked life insurance was down 7.6% compared to the same period in the previous year. Traditional life and annuity insurance, which represents 63% of the life business, rose 0.8%.

According to Axco Global Statistics, the insurance density in Romania was EUR 120 per capita in 2019. EUR 97 of this amount was for non-life insurance and EUR 23 for life insurance.

Market shares of the major insurance groups

Romania – Market shares of the major insurance groups (ring chart)

Source: Financial Supervisory Authority ASF; as of 9M 2020

VIG companies in Romania

Three VIG insurance companies, the non-life insurer Omniasig, composite insurer Asirom and life insurer BCR Life, operate in the Romanian insurance market. Their market share of 20.1% makes the VIG insurance companies the market leader in Romania. They hold the second place for both life insurance and non-life insurance. In November 2020, VIG Insurance Group signed a share purchase agreement with the Dutch company Aegon N.V. to acquire its companies in Hungary, Poland, Romania and Turkey. The acquisition will allow VIG Insurance Group to significantly expand its potential in the pension fund business in Romania. The acquisition is expected to be formally concluded in the 2nd half of 2021. The transaction is subject to the approvals required under supervisory and competition law.

Financial performance indicators in the Romania segment

Premiums by line of business

Romania – Premiums by line of business (ring chart)

Values for 2019 in parentheses

Premium development

The VIG insurance companies in the Romania segment wrote EUR 493.8 million in premiums in 2020, representing an increase of 5.5% (2019: EUR 468.2 million). In addition to increases in the other property and casualty and health insurance lines of business, this was primarily due to good premium growth for motor own damage insurance. Net earned premiums were EUR 375.9 million in 2020, 8.4% higher than the value of EUR 346.9 million in the previous year.

Result before taxes

A profit of EUR 14.2 million was recorded in the Romanian segment in 2020 (2019: loss of EUR 101.8 million). The result of the previous year was affected by a total write-off of goodwill in the amount of EUR 108.8 million. Adjusted for this effect, the result doubled, due in part to an improvement in the combined ratio.

Combined ratio

The combined ratio improved to 99.0% in 2020 due to targeted portfolio adjustments and better claims development (2019: 100.9%).