evolution of the insurance market in the 1st …

1

EVOLUTION OF THE INSURANCE MARKET

IN THE 1ST QUARTER OF 2016

2

TABLE OF CONTENTS

EVOLUTION OF THE INSURANCE MARKET IN Q1 2016 ................................................................ 3

I. INSURANCE COMPANIES ........................................................................................................ 3

I.1. Gross premiums written (GI and LI) .............................................................................................. 3

Gross premiums written for general insurance .............................................................................. 8

Gross premiums written for life insurance ................................................................................... 10

I.2. Gross claims paid by insurers (GCP) ............................................................................................ 12

Gross claims paid related to general insurance ............................................................................ 13

Situation of amounts paid for gross claims, maturities and redemptions related to life insurance

...................................................................................................................................................... 16

I.3. Claims and expense ratio ............................................................................................................ 17

I.4. Technical reserves ....................................................................................................................... 19

Technical reserves established for general insurance .................................................................. 20

Technical reserves established for life insurance ......................................................................... 20

I.6. Liquidity of insurance companies ............................................................................................... 21

I.7. Reinsurance ................................................................................................................................. 22

For the general insurance category .............................................................................................. 22

For the life insurance category ..................................................................................................... 23

I.8. Statistical data under the new solvency regime ......................................................................... 24

I.9. The evolution of the motor vehicle liability insurance market (MTPL) in 2016 ......................... 29

Market share ................................................................................................................................. 32

Evolution of damages.................................................................................................................... 34

Monitoring of MTPL insurance premiums for vans and passenger vehicles January - June 2016 40

I.10. Home insurance ........................................................................................................................ 43

II. INSURANCE AND/OR REINSURANCE BROKERS ..................................................................... 47

II.1. Insurance intermediation business ............................................................................................ 47

II.2. Revenues obtained from the insurance intermediation business ............................................. 50

List of figures ..................................................................................................................................... 52

List of tables ...................................................................................................................................... 53

3

THE INSURANCE MARKET

The insurance market in Romania last year reversed the downward trend from the period 2013 - 2014

and ended 2015 with a volume of gross premiums written of RON 8.75 billion, up 8.2% compared to

the previous year. This trend continued in the first quarter of 2016, insurers accumulating in the first

quarter of 2016 gross premiums written of RON 2,430,297,723, up 9.16% over the same period last

year.

The positive development in 2016 was influenced by the contribution of general insurance segment,

which recorded an increase of 9.74% over the same period last year, while the life insurance

segment registered a growth of 6.61%.

The insurance sector remains dependent on auto insurance, gross premiums written for class A3

(Insurance of land vehicles other than railway) and class A10 (Motor vehicle liability insurance)

representing 76.34% of total gross premiums written related to the general insurance category in Q1

2016, increasing compared to the same period last year. The underwritings for the two classes of

general insurance increased in 2016, particularly for Class A10, which registered an advance of about

27% over the same period last year.

This report is based on the accounting reports submitted by insurance companies, except the

chapter on the transition to Solvency II, which is based on the reports submitted by insurance

companies falling under this regime.

I. INSURANCE COMPANIES

On 31 March 2016 there were active in the insurance market 35 insurance companies of which 20

have only practiced general insurance activity ("GI"), 8 practiced only life insurance activity ("LI") and

7 practiced composite activity.

In January 2016 the Board of the Financial Supervisory Authority (ASF) decided to apply the

measures of resolution in the case of Carpatica Asig S.A. On 27 July 2016 ASF decided to withdraw

the authorization of Carpatica Asig and trigger the bankruptcy proceedings. This does not affect data

on 31 March 2016, which include the accounting reports of Carpatica Asig.

I.1. Gross premiums written (GI and LI)

Insurers have accumulated in the first quarter (Q1) of 2016 gross premiums written worth RON

2,430,297,723, up 9.16% compared to Q1 2015:

- gross premiums written (GPW) related to general insurance (GI) amounting to RON 1,992,030,603,

up compared to first quarter of the previous year by 9.74%;

- gross premiums written related to life insurance (LI) amounting to RON 438,267,120, up compared

to the similar period of the previous year by 6.61%.

4

Figure 1 The evolution of gross premiums written in 2012 – 2016

Unlike the European insurance market, which is dominated by life insurance segment (about 61%

according to Insurance Europe1 for 2014), in Romania it accounted for only about 18% of gross

premiums written, the market being dominated by life insurance or auto insurance.

Table 1 Dynamics of allocation on insurance segments during 2012 - 2016

Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

GI 1,733,727,436 1,707,087,760 1,698,546,602 1,815,170,223 1,992,030,603

LI 431,871,167 419,662,147 382,283,829 411,103,369 438,267,120

TOTAL 2,165,598,603 2,126,749,907 2,080,830,431 2,226,273,592 2,430,297,723

GI Share (%) 80.06% 80.27% 81.63% 81.53% 81.97%

LI Share (%) 19.94% 19.73% 18.37% 18.47% 18.03%

Table 2 Dynamics of gross premiums written on insurance classes in the period 2012 - 2016

Category Insurance

Class

GPW (RON)

Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

GI

A1 17,598,444 47,916,906 23,478,583 31,617,673 19,798,605

A2 16,653,951 20,310,848 11,176,085 13,695,281 18,516,038

A3 453,490,765 422,824,877 432,850,965 401,837,072 404,817,878

A4 434,819 610,781 267,493 939,988 1,048,271

A5 1,909,677 2,998,097 1,595,751 3,355,232 6,136,720

A6 4,558,213 8,158,378 8,644,513 11,815,498 5,729,841

A7 13,980,833 10,950,591 10,380,251 10,074,131 10,485,193

A8 260,211,348 270,104,694 248,561,260 262,123,350 250,904,550

A9 25,533,510 24,399,973 25,880,842 27,369,201 25,158,719

1 www.insuranceeurope.eu

1.734 1.707 1.699 1.8151.992

432 420 382411

438

0

500

1.000

1.500

2.000

2.500

3.000

TI 2012 T1 2013 TI 2014 T1 2015 T1 2016

mil

. le

i

AV

AG

http://www.insuranceeurope.eu/

5

Category Insurance

Class

GPW (RON)

Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

A10 618,068,014 676,508,834 738,580,212 879,117,632 1,115,884,713

A11 2,687,389 2,624,215 3,277,724 2,865,581 1,801,112

A12 3,511,232 4,477,237 3,282,501 3,606,202 1,124,443

A13 216,814,889 131,332,757 130,029,952 102,735,588 71,856,285

A14 25,494,747 10,228,243 7,037,615 1,382,938 1,701,061

A15 55,802,277 54,779,055 30,686,067 35,847,303 33,858,814

A16 4,255,019 5,352,773 6,964,619 8,586,255 4,689,089

A17 61,886 5,317 4,425 59,310 6,920

A18 12,660,421 13,504,184 15,847,744 18,141,988 18,512,351

TOTAL 1,733,727,436 1,707,087,760 1,698,546,602 1,815,170,223 1,992,030,603

LI

C1 257,057,991 271,624,314 254,835,232 265,637,618 298,911,233

C2 412,568 363,620 310,210 296,242 261,014

C3 156,342,701 134,459,348 112,103,245 127,641,991 116,446,901

C4 711,699 681,820 918,253 688,187 0

C5 - - - - 0

C6 - - - - 0

C7 - - - 0

A1 7,585,761 8,019,100 8,461,688 8,520,286 11,295,280

A2 9,760,447 4,513,945 5,655,201 8,319,045 11,352,692

TOTAL 431,871,167 419,662,147 382,283,829 411,103,369 438,267,120

TOTAL 2,165,598,603 2,126,749,907 2,080,830,431 2,226,273,592 2,430,297,723

Regarding geographical distribution of underwritings, it is noticed that in the case of both general

insurance and life insurance, contracts with the most important aggregate value are concluded in

Bucharest and Ilfov, followed at a significant distance by North-West and Center regions. In the case

of life insurance, the discrepancy between the region of Bucharest and Ilfov and other regions of the

country is much more pronounced.

6

Figure 2 GPW distribution for general insurance in the 8 regions of development of Romania

Figure 3 GPW distribution for life insurance in the 8 regions of development of Romania

82.16%

1.77%

3.18%

2.98% 2.54%

2.66%

1.87%

2.84%

9.61%

9.42%

5.30%

41.17%

7.94%

12.18%

6.26%

8.11%

7

The insurance market in Romania is characterized by a high degree of concentration. In 2015, 79.25%

of the total volume of gross premiums written was covered by 10 insurance companies out of 35

companies that carried out on 31 December 2015 insurance/reinsurance activity, situation similar to

previous years and the first quarter of 2016.

Table 3 The companies with the largest volumes of gross premiums written and their share in total market

(general and life insurance)

No. Company

Total premiums written


(RON)

Total market

share (%)

1 ASIROM VIENNA INSURANCE GROUP 374,771,392 15.42

2 ALLIANZ - TIRIAC ASIGURARI 297,247,063 12.23

3 OMNIASIG VIG 225,736,834 9.29

4 CARPATICA ASIG 224,679,657 9.25

5 EUROINS ROMANIA ASIGURARE REASIGURARE 209,586,753 8.62

Total (1-5) 1,332,021,699 54.81

6 GROUPAMA ASIGURARI 199,842,136 8.22

7 CITY INSURANCE 165,297,552 6.80

8 NN ASIGURARI DE VIATA 157,431,265 6.48

9 GENERALI ROMANIA ASIGURARE REASIGURARE 131,100,249 5.39

10 UNIQA ASIGURARI 115,413,610 4.75

Total (1-10) 2,101,106,511 86.45

Other companies 329,191,212 13.55

TOTAL 2,430,297,723 100.00

8

Gross premiums written for general insurance

The total volume of gross premiums written for general insurance, in Q1 2016, was RON 1,992,030,603,

recording a growth of 9.74% compared to the same period of the previous year.

The top 10 insurance companies that underwrote general insurance premiums accumulated a value

of RON 1,897,813,206, which accounts for 95.27% of this business segment.

Table 4 Ranking of insurance companies based on gross premiums written for general insurance in the first

quarter of 2016

No. Company

Total premiums written


(RON)

Total market

share (%)

1 ASIROM VIENNA INSURANCE GROUP S.A. 345,217,678 17.33

2 ALLIANZ - TIRIAC ASIGURARI S.A. 270,238,907 13.57

3 OMNIASIG VIG (former BCR ASIGURARI VIG) 225,736,834 11.33

4 CARPATICA ASIG S.A. 224,679,657 11.28

5 EUROINS ROMANIA ASIGURARE REASIGURARE S.A. 209,586,753 10.52

Total (1-5) 1,275,459,829 64.03

6 GROUPAMA ASIGURARI S.A. 189,354,781 9.51

7 CITY INSURANCE S.A. 165,297,552 8.30

8 UNIQA ASIGURARI S.A. 115,413,610 5.79

9 GENERALI ROMANIA ASIGURARE REASIGURARE S.A. 112,033,416 5.62

10 P.A.I.D. INSURANCE POOL 40,254,018 2.02

Total (1-10) 1,897,813,206 95.27


TOTAL 1,992,030,603 100.00

Of the total gross premiums written for general insurance, the largest shares are held by classes A3

Insurance of land vehicles other than railway, A8 Insurance against fire and other natural disasters

and A10 Motor vehicle liability insurance, the share of these three classes being 88.95% of total

gross premiums written for the general insurance activity:

Class A10. Motor vehicle liability insurance (MTPL + CLI), with a volume of gross premiums

written of RON 1,115,884,713, accounting for 56.02% of total underwritings for general

insurance, recorded in the first quarter of 2016 an increase by 26.93% compared to the

same period of 2015;

Class A3. Insurance of land vehicles (CASCO), with a volume of gross premiums written of

RON 404,817,878, representing 20.32% of total general insurance, recorded in the analyzed

period a nominal growth of 0.74% compared to the same period of 2015;

Class A8. Insurance against fire and other natural disasters, with a volume of gross premiums

written of RON 250,904,550, accounting for 12.60% of total underwritings for general

insurance, recorded in the first quarter of 2016 a nominal growth of 4.28% compared to the

same period of 2015.

9

Table 5 Structure on general insurance classes

Class

GPW (RON) Share

2016

Percentage

change

2016/2015 (%) Q1 2013 Q1 2014 Q1 2015 Q1 2016

A3 422,824,877 432,850,965 401,837,072 404,817,878 20.32% 0.74

A8 270,104,694 248,561,260 262,123,350 250,904,550 12.60% -4.28

A10 676,508,834 738,580,212 879,117,632 1,115,884,713 56.01% 26.93

Other

classes 337,649,355 278,554,165 272,092,169 220,423,462 11.07% -18.99

TOTAL 1,707,087,760 1,698,546,602 1,815,170,223 1,992,030,603 100.00% 9.74

Figure 4 Evolution of the volume of gross premiums written on general insurance classes (million RON)

In dynamics it is noticed that in the last 4 years the share of gross premiums written for class X has

grown consistently from year to year, to the detriment of other important classes of general

insurance, which shows that the dependence of the overall market on MTPL insurance has increased

(MTPL risk being predominantly in class X).

423 433 402 405

270 249 262 251

677739

879

1.116

338279 272

220

-

200,0

400,0

600,0

800,0

1000,0

1200,0

T1 2013 T1 2014 T1 2015 T1 2016

PBS (lei)

A3 A8 A10 Alte clase

10

Figure 5 Structure dynamics on general insurance classes

Gross premiums written for life insurance

The life insurance segment recorded an increase by 6.61% in the first quarter of 2016 compared to

the same period of the last year.

Also, a high degree of concentration was maintained in 2016, so 10 companies held a share of

92.63% of the total volume of premiums written in this segment, with total underwritings of RON

438,267,120.

Table 6 Ranking of insurance companies based on gross premiums written for life insurance in 2016

No. Company GPW LI (RON)

Market share

(%)

1 NN ASIGURARI DE VIATA SA 157,431,265 35.92

2 METROPOLTAN 62,910,173 14.36

TOTAL (1-2) 220,341,438 50.28

3 BCR ASIGURARI DE VIATA VIENNA INSURANCE GROUP S.A. 43,628,529 9.96



6 BRD ASIGURARI DE VIATA S.A. 25,431,957 5.80


8 ERGO ASIGURARI DE VIATA S.A. 17,344,173 3.96

9 UNIQA ASIGURARI DE VIATA SA 12,595,968 2.87

10 GRAWE ROMANIA ASIGURARE S.A. 11,005,845 2.51

TOTAL (1-10) 405,976,613 92.63

Other companies*) 32,290,507 7.37

TOTAL 438,267,120 100.00

24,766% 25,471% 22,149% 20,331%

15,808% 14,647%14,435%

12,600%

39,637% 43,471% 48,430% 56,024%

19,789% 16,412% 14,986% 11,044%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

T1 2013 T1 2014 T1 2015 T1 2016


11

Of total gross premiums written for life insurance, the highest shares are held by classes C1 life

insurance, annuities and supplemental life insurance and, respectively, C3 Life insurance and

annuities related to investment funds, which together accumulate 94.77% of total gross premiums

written for the life insurance business.

Figure 6 Structure dynamics on life insurance classes

Dynamics analysis leads to the following conclusions:

- Class C1 “Life insurance, annuities and supplemental life insurance” increased in absolute size by

RON 33,273,615 in Q1 2016, respectively by 12.53% compared to the first quarter of 2015;

- Class C3 “Life insurance and annuities related to investment funds” increased in absolute size by

RON 11,195,090 in Q1 2016, respectively by 8.77% compared to the first quarter of 2015;

The category "other classes" had a growth pace of 28.53% compared to Q1 2015, which, in absolute

size, mean an increase in the volume of gross premiums written by RON 5,085,226. This category

mainly includes the following classes:

o class A1 Accidents with gross premiums written of RON 11,295,280, up 32.57%

compared to the first quarter of 2015;

o class A2 Health insurance with gross premiums written of RON 11,352,692, up

19.36% compared to the first quarter of 2015;

64,725% 66,661% 64,616% 68,203%

32,040% 29,325% 31,049% 26,570%

3,236% 4,014% 4,336% 5,227%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

T1 2013 T1 2014 T1 2015 T1 2016

C1 C3 Alte clase

12

Table 7 Structure on life insurance classes

Class

GPW life (RON) Class share in

Q1 2016

Pace of

change

(%) Q1 2013 Q1 2014 Q1 2015 Q1 2016

C1 271,624,314 254,835,232 265,637,618 298,911,233 68.20% 12.53%

C3 134,459,348 112,103,245 127,641,991 116,446,901 26.57% -8.77%

Other classes 13,578,485 15,345,352 17,823,760 22,908,986 5.23% 28.53%

TOTAL 419,662,147 382,283,829 411,103,369 438,267,120 100.00% 6.61%

Figure 7 Evolution of the volume of gross premiums written on life insurance classes (million RON)

I.2. Gross claims paid by insurers (GCP)

At the end of the first quarter of 2016, insurance companies reported gross claims paid (excluding

partial and total maturities and redemptions), aggregate for the two insurance categories,

amounting to RON 955,798,493, as follows:

- RON 913,410,298 related to general insurance contracts (95.57%), down 12.59% compared

to the similar period of 2015 (RON 1,044,934,928);

- RON 42,388,195 are amounts paid for gross claims, related to life insurance, down 2.97%

compared to the similar period of 2015 (RON 43,685,843).

Gross claims for life insurance are added to partial or total maturities and redemptions worth a total

of RON 185,984,741, value increasing by 2.65% compared to the same period of the previous year.

Gross claims paid by insurers in the general insurance segment fell in the first quarter of 2016 mainly

due to bankruptcy in the second half of 2015 of Astra, one of the most important players in the

general insurance market. Astra paid in Q1 2015 gross claims of RON 127,306,850. In 2016, the

Policyholders Guarantee Fund paid damages related to insurance contracts of the company in force

272255

266

299

134112

128116

14 15 18 23

0

50

100

150

200

250

300

350

T1 2013 T1 2014 T1 2015 T1 2016

PBS (lei)

C1 C3 Alte clase

13

at the time of bankruptcy. Eliminating Astra's impact, gross claims paid by insurers in the general

insurance segment remained approximately constant (down 0.46%).

Figure 8 The evolution of the gross claims paid including maturities and redemptions for general and life

insurance (million RON)

Table 8 The dynamics of the gross claims paid, including maturities and redemptions for general and life

insurance, during 2012-2016

Period GI + LI (RON)

Pace of change

compared to the

previous period (%)

GCP GI (RON)

Pace of change

compared to the

previous period (%)

GCP LI, Maturities,

Total and partial

redemptions (RON)

Pace of change

compared to the

previous period (%)

Q1 2012 1,265,310,041 1,090,692,799 174,617,242

Q1 2013 1,304,686,631 3.11% 1,108,771,758 1.66% 195,914,873 12.20%

Q1 2014 1,317,736,628 1.00% 1,134,608,598 2.33% 183,128,030 -6.53%

Q1 2015 1,226,117,960 -6.95% 1,044,934,928 -7.90% 181,183,032 -1.06%

Q1 2016 1,099,395,039 -10.34% 913,410,298 -12.59% 185,984,741 2.65%

Gross claims paid related to general insurance

Of total gross claims paid in Q1 2016 for general insurance, the value related to damages in previous

years was RON 747,467,789, representing 81.83% of the total (84.70% in the same period last year).

This share decreases towards the end of the year, as claim files are instrumented and liquidated for

damages happened in the current year.

In total, gross claims paid by 10 insurance companies accounted for 97.63% of total claims paid at

the level of the general insurance segment.

0

200

400

600

800

1.000

1.200

1.400

TI 2012 TI 2013 TI 2014 TI 2015 TI 2016

1.091 1.109 1.135 1.045913

175 196 183 181

186

mil

. le

i

Indemnizații brute plătite pentru asigurări de viata, Maturitati, Rascumparari totale si partiale (lei)

Indemnizații brute plătite pentru asigurări generale (lei)

14

Table 9 Insurance companies with the largest volume of gross claims paid for general insurance

No. Company GCP GI (RON) Market share (%)

1 OMNIASIG VIG 144,894,850 15.86

2 CARPATICA ASIG 126,048,279 13.80

3 EUROINS ROMANIA ASIGURARE REASIGURARE 120,376,078 13.18

4 ALLIANZ - TIRIAC ASIGURĂRI 107,526,969 11.77

TOTAL (1-4) 498,846,176 54.61

5 GROUPAMA ASIGURARI 105,180,881 11.52

6 ASIROM VIENNA INSURANCE GROUP 92,083,638 10.08

7 CITY INSURANCE 69,555,876 7.62

8 UNIQA ASIGURARI 66,491,843 7.28

9 GENERALI ROMANIA 51,274,363 5.61

10 GOTHAER ASIGURARI - REASIGURARI 8,341,462 0.91

TOTAL (1-10) 891,774,239 97.63


TOTAL 913,410,298 100.00

Significant shares of gross claims paid by insurance companies were recorded in the following

insurance classes (94.38% of the total):

- Class A10. Motor vehicle liability insurance with a volume of gross claims paid of RON 521,550,867,

accounting for 57.10% of total gross claims paid for general insurance, decreasing by 12.51%


- Class A3. Land vehicles insurance (Casco), with a volume of gross claims paid of RON 299,076,137,

accounting for 32.74% of total gross claims paid for general insurance, decreasing by 8.16%


- Class A8. Insurance against fire and other natural disasters, with a volume of gross claims paid of

RON 41,421,117, accounting for 4.54% of total gross claims paid for general insurance, decreasing by

14.06% compared to the first quarter of 2015.

Gross claims paid for the other classes account for 5.62% of total payments related to general

insurance, which in absolute size meant an amount of RON 51,362,177.

15

Figure 9 Structure dynamics on classes of gross claims paid for the general insurance category

Figure 10 Evolution of the volume of GI gross claims paid (million RON)

43,446%33,620% 31,163% 32,743%

4,589%

4,886%4,613% 4,535%

46,186%

47,121%57,038% 57,099%

5,779%14,373%

7,186% 5,623%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

T1 2013 T1 2014 T1 2015 T1 2016


381

326299

55 48 41

535

596

522

163

7551

0

100

200

300

400

500

600

700

TI 2014 TI 2015 TI 2016

A3 A8 A10 alte clase

16

Situation of amounts paid for gross claims, maturities and redemptions related to life

insurance

The value of gross claims, maturities and redemptions related to life insurance was, in Q1 2016, RON

185,984,741, recording a nominal growth of 2.65% over the same period last year.

Cumulative gross payments (indemnities, maturities and redemptions) of 10 insurance companies

accounted for 96.10% of total gross amounts paid at the level of the life insurance segment.

Table 10 Insurance companies with the largest amount of gross claims paid, maturities and redemptions for

life insurance

No. Company

GCP, Maturities, Total

redemptions, Partial

redemptions

Share in

total

1 NN ASIGURARI DE VIATA SA 77,723,293 41.79

2 METROPOLITAN LIFE ASIGURARI S.A. (FORMER AVIVA ASIGURARI DE

VIATA S.A.) 29,551,773 15.89

TOTAL (1-2) 107,275,066 57.68



5 BCR ASIGURARI DE VIATA VIENNA INSURANCE GROUP S.A. 11,787,626 6.34


7 GRAWE ROMANIA ASIGURARE S.A. 5,092,631 2.74

8 SIGNAL IDUNA ASIGURARE REASIGURARE S.A. 4,245,173 2.28

9 GROUPAMA ASIGURARI S.A. 3,531,974 1.90

10 ERGO ASIGURARI DE VIATA S.A. 3,412,844 1.83

TOTAL (1-10) 178,725,693 96.10


TOTAL 185,984,741 100.00

In 2016, the most significant shares in gross claims paid were held by the following insurance classes:

- class C1 Life insurance, annuities and supplemental life insurance, accounting for 63.20%

(RON 30,531,415) of total payments made (RON 31,945,808 in Q1 2015);

- class C3 Life insurance and annuities related to investment funds, accounting for 10.34%

(RON 4,620,592) of the total (RON 3,597,425 in Q1 2015);

- Payments for the other classes were in the amount of RON 7,236,188 and accounted for

14.42% of total payments related to life insurance (RON 8,172,610 in Q1 2015).

17

I.3. Claims and expense ratio

Figure 11 Quarterly evolution of claims ratio and combined claims ratio for the main general insurance

classes during 2014-2016 (Q1 of each year)

In Q1 2016 the claims ratio combined at the level of the entire market improved for insurance

classes with significant share, continuing the trend of the previous year. For CASCO and MTPL+CLI

insurances, the combined claims ratio is for the first time around 100%. However, it is likely that this

situation is intermediary, given that an important factor of the claims ratio is the variation of

technical reserves for claims that happened but haven't been approved yet, which is estimated in

general annually. Consequently, the impact of this variation is not included entirely in analyzes for

the quarter depending on policies of establishing technical reserves related to each insurance

company.

For a more thorough analysis of the claims ratio, we included in the table below the quarterly ratios

calculated on aggregate data. It is noticed that in the last quarter of 2015, especially for the class

A10, the combined claims ratio had a significant growth compared to the quarterly values. It was

due to adjustments made on technical reserves, especially following the audit of the annual financial

statements.

0

20

40

60

80

100

120

140

Ra

ta d

au

ne

i

Ra

ta c

he

ltu

ieli

lor

Ra

ta c

om

bin

ata

Ra

ta d

au

ne

i

Ra

ta c

he

ltu

ieli

lor

Ra

ta c

om

bin

ata

Ra

ta d

au

ne

i

Ra

ta c

he

ltu

ieli

lor

Ra

ta c

om

bin

ata

clasa A3 clasa A8 clasa A10

T1 2014

T1 2015

T1 2016

18

Table 11 Quarterly evolution of claims ratio and combined claims ratio for the main general insurance

classes

Class A3 Class A8 Class A10

Period Claims

ratio

The rate of

acquisition

and

administration

expenses

Combined

claims ratio Claims ratio

The rate of

acquisition

and

administration

expenses

Combined

claims ratio Claims ratio

The rate of

acquisition

and

administration

expenses

Combined

claims ratio

Q1 2014 80.65 33.21 113.86 18.28 40.90 59.18 86.8 40.69 127.49

Q2 2014 79.22 34.86 114.08 23.05 42.41 65.46 82.98 40.86 123.83

Q3 2014 79.89 35.82 115.72 32.10 42.86 74.96 80.71 39.52 120.23

Q4 2014 79.78 36.36 116.14 26.41 42.33 68.74 87.05 39.33 126.38

Q1 2015 75.98 32.62 108.60 10.78 40.35 51.13 82.02 39.31 121.33

Q2 2015 76.59 35.12 111.72 14.15 37.82 51.97 89.08 38.00 127.08

Q3 2015 75.63 35.74 111.37 16.06 37.27 53.34 82.67 35.35 118.02

Q4 2015 74.95 36.67 111.62 21.27 37.66 58.93 101.76 37.37 139.12

Q1 2016 66.18 31.37 97.55 22.85 34.23 57.08 69.79 31.87 101.66

Table 12 Quarterly evolution of the value of acquisition and administration expenses and expenses with

commissions during 2014 - 2016 (first quarter)

Period Indicator class A3 class A8 class A10

Q1 2014

acquisition and

administration expenses

154,622,705 101,053,843 250,774,764

of which expenses with

commissions

53,928,457 52,342,366 127,570,192

Q1 2015

acquisition and


140,607,612 97,773,962 283,104,986


commissions

49,909,060 52,282,828 143,950,388

Q1 2016

acquisition and


133,523,005 81,011,155 268,679,448


commissions

42,508,018 32,652,031 157,722,786

Figure 12 Quarterly evolution of the value of acquisition and administration expenses and expenses with

commissions during 2014 - 2016 (first quarter)

0

50.000.000

100.000.000

150.000.000

200.000.000

250.000.000

300.000.000

cheltuieli de achizitie si

administrare

din care cheltuieli cu

comisioanele


administrare


comisioanele


administrare


comisioanele

T1 2014 T1 2015 T1 2016


19

Table 13 Evolution of expenses with commissions in gross premiums written in the period 2014 - 2016 (first

quarter)

Period class A3 (%) class A8 (%) class A10 (%)

Q1 2014 12.46 21.06 17.27

Q1 2015 12.42 19.95 16.37

Q1 2016 10.50 13.01 14.13

Figure 13 Evolution of expenses with commissions in gross premiums written

It is noticed that the share of expenses with commissions in gross premiums written fell following

the efforts of insurance companies to reduce the combined claims ratio and thus improve the

profitability and financial stability indicators.

The average at market level on all general insurance classes fell from 16.67% in Q1 2014 to 13.49%

in Q1 2016 (Q1/2015: 16.57%).

I.4. Technical reserves

On 31 March 2016, insurance companies had established gross technical reserves for the general

and life insurance business worth a total of RON 14,772,738,663, up compared to the end of 2015

(RON 14,477,264,812). Gross technical reserves established for general insurance recorded a volume

of RON 8,155,815,078 (31 December 2015: RON 7,867,467), thus holding a share of 55.21% of the

total. For life insurance, companies established reserves worth RON 6,616,923,585 (31 December

2015: RON 6,609,799,708), level related to a share of 44.79% of the total.

-

5,000

10,000

15,000

20,000

25,000


T1 2014 T1 2015 T1 2016

20

Technical reserves established for general insurance

For the general insurance business, on 31 March 2016, insurance companies had established gross

technical reserves worth RON 8,155,815,078, increasing compared to 31 December 2015, which can

also be correlated with the decrease in gross claims paid. Corroborating the two indicators, basically

the value and/or number of claims incurred but not yet settled increased. This growth is generated

mainly by the increase in technical reserves for class A10, which is mainly MTPL.

The structure of gross technical reserves for the general insurance category, the share of significant

classes of the total, on 31 December 2016, was the following:

premium reserves, in gross value of RON 3,322,543,527, represents 40.74% of the total

value of gross technical reserves relating to general insurance.

claims reserves approved, worth RON 3,137,973,069, represented 38.48% of the value of

gross technical reserves established for general insurance.

gross claims reserves unapproved, worth RON 1,375,361,115, represented 16.86% of the

value of gross technical reserves established for general insurance.

Table 14 Structure of gross technical reserves for general insurance on 31 March 2016 compared to 31

December 2015

31 March 2016

Share in

total Class A3 Class A8 Class A10

Share of

significant

classes

RON (%) RON RON RON (%)

Premium reserve 3,322,543,527 40.74% 856,203,707 475,489,549 1,508,080,972 85.47%

Claim reserve approved 3,137,973,069 38.48% 360,386,601 279,316,178 2,000,470,267 84.14%

Claim reserve unapproved 1,375,367,750 16.86% 111,524,867 48,860,903 1,113,155,667 92.60%

Other technical reserves 319,930,732 3.92% 94,901,818 127,898,593 44,539,325 83.56%

Total reserves 8,155,815,078 100.00% 1,423,016,993 931,565,223 4,666,246,231 86.08%

31 December

2015

Share in

total Class A3 Class A8 Class A10

Share of

significant

classes

RON (%) RON RON RON (%)

Premium reserve 3,062,384,525 38.92% 876,989,042 461,242,448 1,235,337,609 84.04%

Claim reserve approved 3,090,414,463 39.28% 383,125,730 275,213,626 1,944,754,600 84.23%

Claim reserve unapproved 1,345,973,851 17.11% 106,213,188 40,309,623 1,101,957,433 92.76%

Other technical reserves 368,692,265 4.69% 94,693,415 132,049,123 44,616,307 73.60%

Total reserves 7,867,465,104 100.00% 1,461,021,375 908,814,820 4,326,665,949 85.12%

Technical reserves established for life insurance

For life insurance, the technical reserves maintained relatively constant compared to the end of

2015, reaching the level of RON 6,616,923,585.

21

Of these, reserves related to class C1 Life insurance, annuities and supplemental life insurance, and

those related to class C3 Life insurance and annuities account together for approximately 99% of the

total.

The increase in the value of technical reserves in life insurance is both the effect of underwriting new

risks and fluctuation of the calculated value of reserves following the change in the parameters

included in the technical base (e.g. risk-free yield used to calculate the present value of future flows

of receipts and payments, the rate of annual bonuses included in the insured amount etc.).

Unlike general insurance, where insurance policies have in general a duration of 1 year or less

(reserves established following to be released either upon claim payment or at the end of the

contract), life insurance contracts have a long time horizon, which makes reserves be kept for long

periods of time and accumulate gradually.

In the two tables below, this particularity of the life insurance business is noticed, in the current

context of evolution of the insurance market in Romania, respectively the fact that most of the

increase in gross technical reserves was determined by the increase in the value of the mathematical

reserve.

Table 15 Structure of gross technical reserves for the life insurance category, on 31 March 2016

31 March 2016 (RON) Share in total (%)

Premium reserve 460,642,758 6.96%

Mathematical reserves 5,873,680,524 88.77%

Reserve of benefits and rebates 124,859,110 1.89%

Other technical reserves 157,741,193 2.38%

Total technical reserves related to life insurance 6,616,923,585 100.00%

Table 16 Structure of gross technical reserves for the life insurance category, on 31 December 2015

31 December 2015 (RON) Share in total (%)

Premium reserve 473,673,990 7.17%

Mathematical reserves 5,842,371,891 88.39%

Reserve of benefits and rebates 133,360,953 2.02%

Other technical reserves 160,392,874 2.42%

Total technical reserves related to life insurance 6,609,799,708 100.00%

I.6. Liquidity of insurance companies

The liquidity ratio is determined as ratio between liquid assets provided by rules and short-term

liabilities of insurers to policyholders and, according to prudential requirements, has to be above

par. On 31 March 2016, the liquidity ratio for each of the insurance categories, as well as elements

contributing to its formation recorded the following sizes:

Table 17 Liquidity ratio for each of the insurance categories on 31 March 2016

Government

Bonds

(mln RON)

Municipal

bonds (mln

RON)

Securities traded

(mln RON)

Deposits

(mln

RON)

Current

account and

Cash (mln

RON)

Short-term

bonds (mln

RON)

Liquidity

ratio

GI 4.089 47 234 539 214 2.504 2.05

22

LI 3.287 64 1.244 346 60 908 5.51

Table 18 Liquidity ratio for each of the insurance categories on 31 December 2015

Governmen

t Bonds

(mln RON)

Municipal

bonds (mln

RON)

Securities traded

(mln RON)

Deposits

(mln

RON)

Current

account and

Cash (mln

RON)

Short-term

bonds (mln

RON)

Liquidity

ratio

GI 3.564 47 246 667 323 2.438 2.00

LI 3.124 64 1.257 360 55 881 5.46

Compared to 2015, it is noticed a slight increase in the level of the liquidity ratio for both general

insurance and life insurance.

I.7. Reinsurance

The rate of transfer for reinsurance has increased significantly over recent years for life insurance

activities and for the first time for life insurance activities a significant increase in gross premiums

written is noticed here.

For the general insurance category

Approximately 34% of gross premiums written in the 1st quarter of 2016 in the general insurance

segment were transferred for reinsurance, the level being the highest in the last 5 years and also in

significant increase compared to the same period of 2015, when it amounted to only about 31%.

Table 19 The evolution of GPW and net reinsurance premiums during 2012-2016 (first quarter) for GI

Period GPW (RON) Net reinsurance premiums

(RON) Rate of retention (%)

Rate of transfer for

reinsurance (%)

Q1 2012 1,733,727,436 1,287,774,923 74.28 25.72

Q1 2013 1,707,087,760 1,182,445,754 69.27 30.73

Q1 2014 1,698,546,602 1,157,417,152 68.14 31.86

Q1 2015 1,815,170,223 1,257,509,794 69.28 30.72

Q1 2016 1,992,030,603 1,386,304,452 66.53 33.47

Related to gross claims paid in the first quarter of 2016, about 75% was represented by the financial

effort of insurance companies, the remaining being amounts recovered from reinsurers, share

declining compared to the same period of 2015.

Table 20 The evolution of GCP and net reinsurance GCP during 2012-2016 (first quarter) for GI

Period GCP (RON) Net reinsurance GCP (RON) Rate of retention

(%)

Rate of transfer

for reinsurance

(%)

Q1 2012 1,090,692,799 949,457,721 87.05 12.95

Q1 2013 1,108,771,758 874,692,456 78.89 21.11

Q1 2014 1,134,608,598 659,896,255 58.16 41.84

Q1 2015 1,044,934,928 737,261,798 70.56 29.44

Q1 2016 913,410,298 696,731,534 76.28 23.72

23

From the gross technical reserves existing at the end of the first quarter of 2016, about 34% were

related to transfers for reinsurance, the share being the highest in the last 5 years and being

corroborated with the highest share of transfers for reinsurance related to gross premiums written

in this quarter (the table above).

Table 21 The evolution of gross technical reserves and net technical reserves in reinsurance during 2012-

2016 (first quarter) for GI

Period Gross technical

reserves (RON)

Net technical reserves in

reinsurance (%)

Rate of retention

(%)

Rate of transfer for

reinsurance (%)

Q1 2012 7,307,368,338 5,276,908,100 72.21 27.79

Q1 2013 6,957,220,269 4,905,250,497 70.51 29.49

Q1 2014 7,297,736,309 5,450,238,078 74.68 25.32

Q1 2015 7,794,436,538 5,598,323,126 71.82 28.18

Q1 2016 8,155,815,078 5,425,406,011 66.52 33.48

Traditionally, there are important differences in terms of reinsurance policy between the life

insurance business and the general insurance business. For an important part of the general

insurance products (e.g. catastrophe insurance, liability insurance), as part of the own risk

management strategy, insurers often resort to various forms of contracts of transfer for reinsurance,

thus limiting the maximum damage incurred in case of insured evens with significant financial

impact.

For the life insurance category

In the case of life insurance, in general insurance companies take a much larger share of the

underwritten risk. Due to the fact that insurance premiums are in general expected and

compensation in case of occurrence of the insured event is set under contract for each event, so

more predictable, life insurance companies don't resort as frequently as general insurance

companies to the transfer for reinsurance. In the last 5 years, the rate of transfer for reinsurance

was below 4% of gross premiums written and no more 2% of gross technical reserves, fluctuations

from year to another not being significant, except for the first quarter of 2016.

Table 22 The evolution of GPW and net reinsurance premiums during 2012-2016 (first quarter) for LI

Period Gross premiums

written (RON) Net reinsurance premiums (RON)

Rate of retention

(%)

Rate of transfer

for reinsurance (%)

Q1 2012 431,871,167 418,134,645 96.82 3.18

Q1 2013 419,662,147 404,663,812 96.43 3.57

Q1 2014 382,283,829 368,791,710 96.47 3.53

Q1 2015 411,103,369 395,395,018 96.18 3.82

Q1 2016 438,267,120 388,565,961 88.66 11.34

24

Table 23 The evolution of GCP and net reinsurance GCP during 2012-2016 (first quarter) for LI

Period GCP

(RON) Net reinsurance GCP (RON)

Rate of retention

(%)

Rate of transfer

for reinsurance

(%)

Q1 2012 32,801,363 28,616,564 87.24% 12.76%

Q1 2013 31,946,430 29,455,080 92.20% 7.80%

Q1 2014 36,683,740 32,772,931 89.34% 10.66%

Q1 2015 43,685,843 37,387,050 85.58% 14.42%

Q1 2016 42,388,195 37,794,323 89.16% 11.34%


2016 (first quarter) for LI

Period Gross technical

reserves (RON)

Net technical reserves in

reinsurance (%)

Rate of retention

(%)

Rate of transfer

for reinsurance

(%)

Q1 2012 4,991,821,240 4,901,654,068 98.19% 1.81%

Q1 2013 5,584,699,095 5,491,700,234 98.33% 1.67%

Q1 2014 5,943,881,236 5,869,018,309 98.74% 1.26%

Q1 2015 6,290,008,894 6,250,732,255 99.38% 0.62%

Q1 2016 6,616,923,585 6,586,679,218 99.54% 0.46%

I.8. Statistical data under the new solvency regime

Entry into force of Solvency II Directive as of 1 January 2016 required insurance companies to align

with new rules and standards. The Directive enhances consumer protection by introducing

prudential financial requirements (Pillar I) suitable for securing the guarantee of payments to

owners and/or beneficiaries of insurance policies.

32 insurance companies became subject to this regime on 1 January 2016.

Being a prudential regime based on risks, Solvency II uses specific models of evaluation of assets,

liabilities and capital requirement for insurance activities. By applying them, significant differences

Technical reserves

Minimum capital requirement

(MCR)

Solveny capital requirement (SCR) Total liabilities

=

Total Assets

Other obligations

Prudential financial requirements according to Solvency II

25

result compared to the values calculated according to statutory regulations (Solvency I regime),

especially in terms of reserves and prudential financial requirements (capital requirement).

Figure 14 Additional requirement of capitalization following the move to SII

According to Solvency II, capital requirements for insurance companies are higher, being based on

risks actually taken by them (both from an investment perspective and in terms of underwritings). A

comparative analysis between capital requirements imposed by Solvency II and Solvency I indicates

for the insurance sector in Romania an additional requirement of capitalization worth RON 1.26bn at

market level, which accounts for approximately 16% of the volume of gross premiums written in

2015.

The additional requirement of financing appeared with the move to the Solvency II regime is

partially covered by the surplus of own funds resulting from the change of the asset and reserve

evaluation method (especially for life insurance). Thus, on 1 January 2016 companies had eligible

own funds to cover capital requirements increasing by RON 1.14bn (about 40%) compared to the

available solvency margin on 31 December 2015, according to the previous prudential regime.

Figure 15 Additional capitalization resulting from the move to Solvency II

During Q1 2016, both the value of assets and that of liabilities of insurance companies (measured

according to the principles of Solvency II regime) increased marginally. Thus, total assets of

003

001

001

,00

,500

1,00

1,500

2,00

2,500

3,00

Cerință de capital SII Cerință de capital SI Cerință suplimentară ca urmare a trecerii la SII

Mil

iard

e le

i

3,97

2,83

1,14

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

Fonduri proprii eligibile Marja disponibilă Diferență fonduri proprii

Mil

iard

e le

i

26

insurance companies increased by 3.5% in the first quarter of 2016 compared to the value posted on

1 January 2016.

Figure 16 The evolution of total assets and liabilities of insurance companies

During the first quarter, assets of insurance companies increased faster than liabilities (according to

evaluations based on Solvency II), which is the expression of a viable activity in the market as a

whole. Thus, the surplus of assets compared to liabilities was RON 3.92bn on 31 March 2016, up

compared to RON 3.78bn on 1 January 2016.

Figure 17 The evolution of Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR)

Following the increase in the underwriting activity, the level of prudential financial requirements

(expressed in the Solvency II regime by SCR and MCR) also increased during Q1 2016.

A comparative analysis between the situation recorded on Day 1 and that existing at the end of the

first quarter of 2016 indicates an increase in the solvency capital requirement (SCR) by RON 27mln,

i.e. a nominal increase by over 1%. This indicator has a meaning equivalent to the maximum

between the safety fund and the minimum solvency margin that was calculated in the Solvency I

regime.

016017

013 013

0

2

4

6

8

10

12

14

16

18

Day 1 Trim. I 2016

Mil

iard

e le

i

Total active Total datorii

2.599 2.626

1.104 1.134

,0

500,0

1000,0

1500,0

2000,0

2500,0

3000,0

Day 1 Trim. I 2016

Mil

ioa

ne

le

i

SCR MCR

27

Regarding the minimum capital requirement, which replaces with the entry into force of Solvency II

regime the safety fund, an increase is noticed during Q1, by 2.7% (about RON 30mln).

Eligible own funds to cover the solvency capital requirement was at the end of Q1 2016 RON 4.02bn,

up 1.5% compared to Day 1.

Figure 18 The evolution of eligible own funds to cover the solvency capital requirement

The aggregate value of eligible own funds to cover SCR is formed by totaling the own funds of the

company classified on the 3 tiers defined by the Solvency 2 regime depending on quality criteria.

Figure 19 The structure of eligible own funds to cover SCR (D1)

On 1 January 2016 (the first day of applicability of the Solvency II regime), eligible own funds were

worth RON 3.9bn at the level of the entire system, consisting mainly of Tier 1 items without

restrictions (93.11%) and Tier 2 items (4.77%).

During the first quarter, eligible own funds had an upward evolution, reaching the value of RON 4bn.

In terms of components, there were no significant changes, Tier 1 items without restrictions still

having the largest share (93.51%).

004 004

000

001

001

002

002

003

003

004

004

005

Day 1 Trim. I 2016

Mil

iard

e le

i

Rang 1 fără restricții

93%

Rang 1 cu

restricții 1%

Rang 2

5%

Rang 3

1%

Altele

7%

28

Figure 20 The structure of eligible own funds to cover SCR (31 March 2016)

The significant share of Tier 1 items in total eligible own funds indicates that, at market level, the

capital held by insurance companies in Romania is of very good quality (mainly equity).

SCR and MCR rates represent the ratio between the eligible own funds to cover capital requirements

and their actual value. In the first quarter of 2016, there are 6 companies that fail to fulfill the

Solvency Capital Requirement (SCR), of 32 that report in the Solvency 2 regime, and 4 that fail to

fulfill the Minimum Capital Requirement (MCR), of which 3 don't fulfill the Solvency Capital

Requirement either.

Figure 21 The distribution of insurance companies depending on SCR/MCR rate on 31 March 2016

Rang 1 fără restricții

94%

Rang 1 cu

restricții 0%

Rang 2

5%

Rang 3

1%

Altele

6%

29

It can be noticed that for most companies the value of eligible own funds increased marginally

during Q1 2016. Also, the degree of coverage of SCR improved both for the entire market (as it result

from data presented above) and at individual level, for most of the companies. Also, it is noticed that

on 31 March 2016 for most companies the level of eligible own funds was positive and the SCR rate

was above par.

I.9. The evolution of the motor vehicle liability insurance market (MTPL) in 2016

In early 2016, the following nine insurers authorized by ASF for MTPL activities were active in the

insurance market: Allianz-Ţiriac Asigurări S.A., Asigurarea Românească - Asirom Vienna Insurance

Group S.A., Societatea de Asigurare - Reasigurare City Insurance S.A., Carpatica SA, Euroins România

Asigurare - Reasigurare S.A., Generali Romania Asigurare Reasigurare S.A., Groupama Asigurări S.A.,

Omniasig Vienna Insurance Group S.A. and Uniqa S.A. On 27 July 2016, the operating authorization

was withdrawn for Carpatica SA, the bankruptcy proceedings being triggered in its case.

Table 25 The evolution of gross premiums written for class A10 (MTPL+CLI)

Period GPW class A10

(MTPL + CLI) (RON) Pace of change GPW (%)

Q 1 2011 667,874,341 -

Q 1 2012 618,068,014 7.46%

Q 1 2013 676,508,834 9.46%

Q 1 2014 738,580,212 9.18%

Q 1 2015 879,117,632 19.03%

Q 1 2016 1,115,884,713 26.93%

The total amount of insurance premiums underwritten for MTPL during the first quarter of 2016

amounted to RON 1,078,284,954, the remainder to the total of the A10 class representing the

carrier liability insurance.

The MTPL segment was one of the most dynamic during 2015, with an increase in gross premiums

written much more extensive compared to the market average. Thus, the total amount of insurance

premiums written for MTPL at the end of 2015 reached the value of RON 3,115 thousand, compared

to 2014 recording an increase by 16.6%. This growth continued in the first quarter of 2016, with an

increase in gross premiums written by 31.6% compared to the same period of the previous year.

30

Figure 22 The evolution of gross premiums written for MTPL during 2010-2015

Figure 23 The evolution of gross premiums written for MTPL quarterly during 2015-2016

Table 26 The pace of change of MTPL market indicators from quarter to quarter during 2015-2016

Period

GPW MTPL

(thousand

RON)

Pace of change

(%)

Average

premium

(RON)

Pace of change

(%)

No. of

contracts

(annual units)

Pace of change

(%)

Q1/2015 819,416

592 1,384,486

Q2/2015 745,994 -8.96% 629 6.24% 1,186,430 -14.31%

Q3/2015 638,534 -14.40% 678 7.86% 941,515 -20.64%

Q4/2015 911,149 42.69% 740 9.17% 1,230,662 30.71%

Q1/2016 1,078,285 18.34% 747 0.86% 1,444,059 17.34%

Expressed in annual units (to take into account the various duration of policies), the number of

contracts concluded for MTPL in the first quarter of 2016 was 1,444,059, which means an increase

by 4.30% compared to the similar period of the previous year and by 17.34% compared to the fourth

quarter of 2015.

2010 2011 2012 2013 2014 2015

PBS (mii lei) 2.464.451 1.874.886 2.055.110 2.367.108 2.671.700 3.115.092

Nr contracte încheiate 6.539.783 6.400.066 6.779.620 6.901.857 7.141.794 7.314.551

Nr contracte (unități anuale) 4.064.523 4.184.632 4.325.404 4.399.068 4.602.825 4.743.093

01.000.0002.000.0003.000.0004.000.0005.000.0006.000.0007.000.0008.000.000

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

PBS (mii lei) Nr contracte încheiate Nr contracte (unități anuale)

Q12015 Q22015 Q32015 Q42015 Q12016

PBS (mii lei) 819.416 745.994 638.534 911.149 1.078.285

Nr contracte încheiate 1.986.031 1.877.921 1.554.967 1.895.632 2.050.417

Nr contracte (unități anuale) 1.384.486 1.186.430 941.515 1.230.662 1.444.059

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

PBS (mii lei) Nr contracte încheiate Nr contracte (unități anuale)

31

This increase in the number of MTPL contracts (both as a total and especially expressed in annual

units) was accompanied by an improvement in the contracts' structure on maturities. Thus,

compared to Q1 2015 it is noticed a significant growth of the number of MTPL contracts concluded

with a duration of 12 months (+7.7%) and a decrease in the number of contracts for 6 months (-

1.92%), while the number of contracts for 1 month was maintained very low (only 6.46% of the

total).

At the same time, data below show that the total number of MTPL policies in force at the end of Q1

2016 was 4,652,631, up approximately 3% compared to the same period of the previous year.

Table 27 Number of contracts on natural and legal persons

Name of the indicator

3/31/2016 3/31/2015

Natural

persons

Legal

persons Total

Natural

persons

Legal

persons Total

Number of contracts in force

at the end of the reporting

quarter (1), of which

3,527,480 1,125,151 4,652,631 3,425,001 1,093,427 4,518,428

With validity for 6 months or

12 months 3,488,306 1,115,961 4,604,267 3,389,518 1,087,648 4,477,166

With validity for 1 month 39,174 9,190 48,364 35,483 5,779 41,262

Number of contracts

concluded in the reporting

financial year (2), of which:

1,586,031 464,386 2,050,417 1,544,028 442,003 1,986,031

With validity for 12 months 701,433 246,602 948,035 641,931 238,339 880,270

With validity for 6 months 767,322 202,659 969,981 800,110 188,857 988,967

With validity for 1 month 117,276 15,125 132,401 101,987 14,807 116,794

Gross premiums collected (3): -

RON - 502,199,585 452,538,026 954,737,611 429,817,523 352,447,911 782,265,434

Gross premiums written (4), of

which: - RON - 521,879,258 556,405,696 1,078,284,954 431,323,004 388,092,613 819,415,617

With validity for 12 months 269,507,457 324,457,579 593,965,036 222,212,417 255,157,009 477,369,426

With validity for 6 months 243,737,647 229,973,771 473,711,418 202,946,997 131,405,055 334,352,052

With validity for 1 month 8,634,154 1,974,346 10,608,500 6,163,590 1,530,549 7,694,139

Table 28 The share of the number of contracts concluded in the period in total contracts depending on the

contracted period - quarterly 2015-2016

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

For a period of 12 months 44.32% 32.62% 29.64% 36.90% 46.24%

For a period of 6 months 49.80% 59.87% 60.11% 54.63% 47.31%

For a period of 1 month 5.88% 7.52% 10.25% 8.47% 6.46%

Total 100.00% 100.00% 100.00% 100.00% 100.00%

In terms of distribution of contracts depending on the contracted period of the policy (12 months/6

months/1 month), the evolution in the last 5 years indicates a slight trend of consolidation of the

market, in the sense of increase in the share of MTPL policies concluded for a period of 1 year.

32

Table 29 The share of the number of contracts concluded in total contracts depending on the contractor

(natural or legal person) -quarterly 2015-2016

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

Natural persons 77.74% 79.45% 79.13% 78.99% 77.35%

Legal persons 22.26% 20.55% 20.87% 21.01% 22.65%

Total 100.00% 100.00% 100.00% 100.00% 100.00%

In the last year, there were no significant changes in the structure of customer portfolios, so at the

level of the entire market the share of contracts concluded with natural persons remained constant,

around 78-79%.

Market share

After Asirom bankruptcy (exit from the market of a top 3 competitor), it was noticed that market

redistribution was made among a small group of companies, respectively Asirom, Carpatica, Euroins

and City, noticing the strong growth of Asirom, to approximately 26% of the MTPL market (Asirom

has basically doubled its market share in the first 3 months of 2016).

Table 30 Ranking of insurance companies based on gross premiums written for MTPL in the first quarter of

2016:

No. Company GPW MTPL (RON) Share (%)

1 ASIROM VIG 278,608,851 25.84

2 CARPATICA ASIG 206,971,941 19.19

3 EUROINS ROMANIA 200,533,238 18.60

4 CITY INSURANCE 125,162,012 11.61

5 ALLIANZ - TIRIAC ASIGURĂRI 74,810,033 6.94

Total (1-5) 886,086,075 82.18

6 OMNIASIG VIG 60,797,198 5.64

7 GROUPAMA ASIGURĂRI 55,322,671 5.13

8 UNIQA ASIGURĂRI 49,321,297 4.57

9 GENERALI ROMANIA 26,757,713 2.48

TOTAL 1,078,284,954 100.00

Also, a significant concentration is noticed to the first insurers of the top, reaching the situation

where the top 4 insurers hold over 75% of the MTPL portfolio in Romania.

Regarding the history of competition in the MTPL market and the battle for winning higher market

share, statistics for 2011-2015 indicate that traditionally the MTPL market in Romania has been

dominated by 3-4 large insurers, while the shares of the other players were much lower or even

insignificant. For example, at the end of 2015 the companies with the largest share in the MTPL

market were Euroins, Carpatica and Asirom, which held together over half the market (51.18%).

33

Table 31 Evolution of market shares recorded on MTPL for 2011-2015:

Year 2011 Year 2012 Year 2013 Year 2014 Year 2015

1 Euroins 12.8% 18.8% 19.5% 16.6% 22.0%

2 Carpatica Asig 9.2% 12.7% 17.3% 18.0% 16.4%

3 Asirom VIG 15.6% 10.8% 8.6% 9.4% 12.7%

4 City Insurance 0.3% 2.3% 7.5% 10.7% 10.4%

5 Omniasig VIG*) 20.4% 10.2% 7.9% 9.9% 10.2%

6 ASTRA***) 20.3% 16.7% 15.1% 15.4% 8.7%

7 Allianz Țiriac 8.0% 8.3% 8.7% 8.3% 8.2%

8 Groupama 4.3% 9.3% 5.2% 4.3% 5.6%

9 Uniqa 4.3% 7.1% 8.2% 5.5% 3.8%

10 Generali**) 4.6% 3.6% 1.7% 1.7% 1.9%

11 ABC 0.1% 0.1% 0.3% 0.3% 0.0%

Total 100% 100% 100% 100% 100%

*) For the years before the merger, Omniasig and BCR Asigurari Generale figures were compiled

**) For the years before the merger, Generali and Ardaf figures were compiled

***) Data on 30 June 2015 for 2015

ASIROM VIG ranks the first in terms of the volume of gross premiums written for MTPL, holding a

market share of approximately 26%. Insurance companies Carpatica, Euroins, City Insurance and

Allianz Țiriac hold significant shares in the MTPL market, being in the top 5 companies in this

segment by gross premiums written.

According to the main indicators used by the Competition Council, the concentration risk in the MTPL

market is medium to high, the top 5 players holding a total market share of over 82%.

The Herfindahl-Hirschman index (HH) is calculated by summing the squares of the individual market

shares of all firms in the market. Thresholds used in this analysis consider a high concentration for an

index higher than 0.2, a moderate concentration for HH between 0.1 and 0.2 and a low concentration

for HH less than 0.1.

34

Figure 24 Degree of concentration of the MTPL market

Evolution of damages

At the level of the entire market, the value of gross damage paid was RON 513,798,063, down 12%

from the same quarter of 2015. The number of claim files paid recorded a decrease by

approximately 15%, from 85,209 to 74,743 files. Thus, the average claim paid for the market as a

whole was approximately RON 6.874. This decrease is mainly generated by the exit in 2015 of an

important player from the market (Astra), claims for MTPL contracts related to this company

currently being paid by the Policyholders Guarantee Fund.

The number of claim files for bodily injuries for the entire market in Q1 2016 was 2,510 files, up

0.5%, the value of gross compensation paid amounting to RON 98,060,033, down over 9% compared

to the same period of the previous year. It results an average compensation for bodily injuries of

RON 39,068. While during 2010-2015 there was an increase by 4 times in the volume of

compensation paid for bodily injuries, in the first quarter of 2016 the trend seems to have reversed.

Figure 25 The quarterly evolution of MTPL claims paid on bodily injuries (in thousand RON)

06

4%

08

2%

09

3%

,164,997

-

,020,000

,040,000

,060,000

,080,000

,100,000

,120,000

,140,000

,160,000

,180,000

000%

010%

020%

030%

040%

050%

060%

070%

080%

090%

100%

CR3 CR5 CR7 HHI

Q12015 Q22015 Q32015 Q42015 Q12016

Vatamari corporale 108.104 118.588 91.396 121.091 98.060

Numar dosare 2.498 1.601 1.288 1.406 2.510

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

0

500

1.000

1.500

2.000

2.500

3.000

35

For material damages, gross compensations of RON 415,738,030 were paid, resulting an average of

RON 5,756, up around 2.9% compared to Q1 2015.

Figure 26 The quarterly evolution of MTPL material damages (in thousand RON)

Table 32 The evolution of technical reserves quarterly during 2015 - Q1 2016 (thousand RON)

Table 33 The situation on companies of claim files paid in Q I 2016 (the current year and the previous years)

COMPANY

Number of claim files

paid (pieces)

Share in

total

Gross compensation paid

(RON)

Share in

total

VC DM Total % VC DM Total %

1 ABC2 2 13 15 0.02% 54,000 31,181 85,181 0.02%

2 ALLIANZ 136 5,274 5,410 7.24% 4,320,852 23,863,331 28,184,183 5.49%

3 ASIROM 625 8,309 8,934 11.95% 10,386,802 55,247,536 65,634,338 12.77%

2 the MTPL authorization of ABC Asigurări was withdrawn upon demand in 2015

Q12015 Q22015 Q32015 Q42015 Q12016

Daune materiale 476.812 363.548 312.206 358.044 415.738

Numar dosare 85.209 66.331 55.973 60.267 72.233

0

100.000

200.000

300.000

400.000

500.000

600.000

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

Q12015 Q22015 Q32015 Q42015 Q12016

Total 2.649.845 2.752.071 2.324.281 2.756.322 2.987.479

IBNR 877.460 854.233 747.750 941.051 1.059.143

RBNS 1.772.385 1.897.838 1.576.531 1.815.271 1.928.336

0

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

36

4 CARPATICA 476 14,837 15,313 20.49% 26,163,535 93,830,651 119,994,186 23.35%

5 CITY 85 8,762 8,847 11.84% 3,036,544 52,148,208 55,184,752 10.74%

6 EUROINS 358 19,951 20,309 27.17% 19,523,230 98,657,237 118,180,467 23.00%

7 GENERALI 110 1,395 1,505 2.01% 3,788,480 6,037,328 9,825,808 1.91%

8 GROUPAMA 190 3,331 3,521 4.71% 4,061,932 17,698,704 21,760,636 4.24%

9 OMNIASIG 382 6,634 7,016 9.39% 19,395,848 43,600,190 62,996,038 12.26%

10 UNIQA 146 3,727 3,873 5.18% 7,328,810 24,623,664 31,952,474 6.22%

TOTAL 2,510 72,233 74,743 100.00% 98,060,033 415,738,030 513,798,063 100.00%

Figure 27 The evolution of the average premium and average claim during 2010-2015

The comparative analysis between the evolution of the average MTPL premium and the volume of

the average claim paid by insurers indicates a similar evolution in 2010-2015, respectively a constant

increase in the value of the average claim, which was inherently felt in the MTPL premium.

Figure 28 The evolution of the average premium and average claim during 2015-2016 - quarterly

For the entire market, the average annualized MTPL premium increased in the first quarter of 2016

by only 0.86% compared to the last quarter of 2015, respectively by 26.16% compared to the same

period of the previous year.

2010 2011 2012 2013 2014 2015

Prima medie RCA 606 448 475 538 580 657

Dauna medie RCA 4.854 5.311 6.010 6.284 6.901 7.101

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

0

100

200

300

400

500

600

700

Prima medie RCA Dauna medie RCA

Q12015 Q22015 Q32015 Q42015 Q12016

Prima medie RCA 592 629 678 740 747

Dauna medie RCA 6.669 7.097 7.048 7.769 6.874

0

100

200

300

400

500

600

700

800

6.000

6.200

6.400

6.600

6.800

7.000

7.200

7.400

7.600

7.800

8.000

37

Table 34 The average premium annualized in RON at market level in the last consecutive 5 quarters

The average premium annualized in RON at market level 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1

Total market 592 629 678 740 747

Natural persons 411 439 476 502 477

Legal persons 1,162 1,267 1,319 1,517 1,593

- For contracts for 12 months 542 597 663 704 627

- For contracts for 6 months 676 660 689 784 977

- For contracts for 1 month 791 829 832 954 961

The average MTPL damage paid in the first quarter of 2016 fell compared to the fourth quarter of

2015, but increased compared to the first quarter of 2015. Given that technical reserves increased

significantly in the first quarter of 2016, this decrease in the average claim depending on claims paid

may be overestimated. However, if the decrease in the level of the average claim in Q1 2016 is

confirmed by the evolution of this indicator in the following quarters, it creates prerequisites for

capping the growth of MTPL tariffs in the coming period, given that the claim is the main cost

influencing the MTPL price.

Table 35 Detailing the method of calculation of the average premium for Q1 2016

Total Natural Persons Legal Persons

Number of contracts concluded for the period, of which 2,050,417 1,586,031 464,386

For a period of 12 months 948,035 701,433 246,602

For a period of 6 months 969,981 767,322 202,659

For a period of 1 month 132,401 117,276 15,125

MTPL premiums written - RON of which: 1,078,284,954 521,879,258 556,405,696

With validity for 12 months 593,965,036 269,507,457 324,457,579

With validity for 6 months 473,711,418 243,737,647 229,973,771

With validity for 1 month 10,608,500 8,634,154 1,974,346

The average MTPL premium for 12-month contracts

(calculated as ratio between the volume of premiums

written for contracts with a validity of 12 months and the

number of MTPL contracts with a validity of 12 months) -

RON

626.52 384.22 1,315.71

The average annualized MTPL premium for 6-month

contracts (calculated as ratio between the volume of

premiums written for contracts with a validity of 6 months

and the number of MTPL contracts with a validity of 6

months multiplied by 2) - RON

976.74 635.29 2,269.56

The average annualized MTPL premium for 1-month

contracts (calculated as ratio between the volume of

premiums written for contracts with a validity of 1 month

and the number of MTPL contracts with a validity of 1

month multiplied by 12) - RON

961.49 883.47 1,566.42

Annual exposure units (number of 12-month

contracts + number of 6-month contracts divided by

2 + number of 1-month contracts divided by 12)

1,444,059 1,094,867 349,192

Average annualized MTPL premium - RON (Weighted

average of average annualized premiums for each

category with the number of annual exposure units in

each category)

746.70 476.66 1,593.41

38

Table 36 The evolution of average claim for natural persons during 2015-2016

Quarter

Individuals

Bodily injuries Material damages Total

Q1/2015

Number of claim files paid: 1,632 52,484 54,116

Gross claims paid: - RON - 68,589,662 271,143,740 339,733,402

Average claim 42,028 5,166 6,278

Q2/2015



Average claim 65,401 4,939 6,451

Q3/2015

Number of claim files paid: 793 33,086 33,879


Average claim 65,626 5,407 6,816

Q4/2015



Average claim 83,578 5,107 6,901

Q1/2016



Average claim 36,410 5,152 6,193

Table 37 The evolution of average claim during 2015-2016

Quarter

Legal entities


Q1/2015



Average claim 45,629 6,285 7,299

Q2/2015



Average claim 88,849 6,270 8,042

Q3/2015



Average claim 79,504 5,825 7,385

Q4/2015



Average claim 89,870 7,160 9,038

Q1/2016



Average claim 43,317 6,743 7,988

39

Table 38 The evolution of average claim per total during 2015-2016

Quarter

Total


Q1/2015



Average claim 43,276 5,596 6,669

Q2/2015



Average claim 74,071 5,481 7,097

Q3/2015



Average claim 70,959 5,578 7,048

Q4/2015



Average claim 86,124 5,941 7,769

Q1/2016



Average claim 39,068 5,756 6,874

40

Monitoring of MTPL insurance premiums for vans and passenger vehicles January - June

2016

ASF has constantly monitored the evolution of MTPL tariffs in the segment of vans/trucks

and passenger vehicles, requesting aggregate information from each insurer on the number of MTPL

policies and the actual value of gross premiums written in these categories of vehicles.

Starting with the month of January 2016, the monitoring and statistical analyzes on the

evolution of MTPL tariffs for vans/trucks and passenger vehicles were made systematically, on a

monthly basis, by ASF.

The aggregate results at the level of the entire market were made public by press releases,

the statistical data being still available on the website of the institution

(http://asfromania.ro/ro/informatii-publice/statistici/statistici-asigurari).

Thus, according to reports sent by insurance companies within the monitoring process of

MTPL tariff evolution handled by ASF, in January 2016 (the moment of initiating the comparative

analyzes on MTPL tariffs), the average premium for policies concluded for 12 months, calculated

cumulatively for the vans/trucks and passenger transport segments, recorded an increase of 42%

compared to June 2015. Separately, in the vans/trucks segment, the average premium climbed by

46%, while for passenger transport vehicles the increase was 61%. In particular, if only the group of

vehicles falling with B0 bonus class is analyzed, the reports of insurers show that the average

premium increased by 43% for the two segments cumulatively, respectively by 47% for the

vans/trucks segment and by 36% for passenger transport vehicles.

Moreover, statistical data centralized in the following months have not indicated significant

increases in the MTPL tariffs, usually recording only slight adjustments upwards or downwards,

depending on the evolution of the type and/or volume of contracts concluded, respectively on the

categories of policyholders and insured vehicles in the respective period.

According to the latest statistics available at ASF, at the level of both categories of vehicles

included in monitoring (vans/trucks and means of passenger transport), on all bonus-malus classes,

the average increase in MTPL premiums in the period of June 2015 - June 2016 was 52.73%, within

the 50% ceiling set under the Protocol concluded by ASF with carriers in December 2015. In June

2016, the average premium for the two categories decreased by 4.3% compared to May, registering

a correction after the 6.1% rise in May compared to April.

The average premium related to Compulsory Civil Liability Insurance for Motor Vehicles

(MTPL) concluded for vehicles in the category of means of passenger transport, on all bonus-malus

classes, for 12 months, fell in June 2016 by 26% compared to the level recorded in the previous

month, after in May it had recorded a decrease by 10.8% vs. April. Thus, for the first time since ASF

started the monthly monitoring of MTPL tariffs evolution on the main segments of vehicles, the

average MTPL premium for the group of carriers of passengers marks two consecutive months of

decline, indicating a significant move for regulating the market and reshaping the portfolio structure.

The data are even more relevant as in June 2016 2,218 policies were concluded for this group of

vehicles, up 40% compared to sales in April and May. Thus, the average premium for means of

passenger transport in June was RON 3,458, by 14.24% higher than in June 2015. Evolution of

premiums differs from one vehicle segment to another, depending on risk data, but reports to ASF

show, for example, a decrease of over 10% of the average MTPL premium for means of passenger

http://asfromania.ro/files/asigurari/statistici/BM%20Iunie%202016_comparativ_finale.pdf

http://asfromania.ro/ro/informatii-publice/statistici/statistici-asigurari

41

transport with up to 18 seats in June 2016 vs. June 2015. For the segment with 18-40 seats, the

average MTPL premium increased in the last year by 11.16%.

The MTPL market remained tense in the category of vans/trucks, where the average

premium related to policies for twelve months fell by 2.4% in June compared to May, while in May it

had climbed by 8% compared to April. Compared to June 2015, the average premium for this

category of vehicles registered a growth of 61.55%, amounting to RON 3,016. For the segment

between 7.5 and 16 tons, the average MTPL premium was in June RON 2,207, 11.85% higher than in

June 2015, while for commercial vehicles weighing up to 3.5 tons the annual average premium

increase was 15.4%.

ASF will continue the process of monitoring of actual tariffs charged for both categories of vehicles

included in monitoring (vans/trucks and means of passenger transport), the results following to be

made public each time.

Figure 29 The evolution of the average monthly premium (RON) for vans/trucks for the bonus/malus

category B0

Iunie 2015Ianuarie

2016

Februarie

2016

Martie

2016

Aprilie

2016Mai 2016 Iunie 2016

pana la 3500 1.343 1.526 1.550 1.554 1.582 1.610 1.713

intre 3500 si 7500 2.285 2.048 1.871 1.767 2.375 2.391 2.376

intre 7500 si 16000 2.804 2.624 2.604 2.519 2.823 4.224 2.913

>16000 6.058 9.965 10.002 10.426 10.699 10.679 10.790

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

11.000

pana la 3500 intre 3500 si 7500 intre 7500 si 16000 >16000

42


category BM

Figure 31 The evolution of the average monthly premium (RON) for passenger transport vehicles for the

bonus/malus category B0

Iunie 2015Ianuarie

2016

Februarie

2016

Martie

2016

Aprilie

2016Mai 2016 Iunie 2016

pana la 3500 968 1.050 1.123 1.096 1.127 1.073 1.117

intre 3500 si 7500 1.700 1.625 1.567 1.276 1.764 1.947 1.966

intre 7500 si 16000 1.973 2.354 1.826 2.417 2.161 2.735 2.207

>16000 4.701 7.856 8.356 8.095 8.391 8.704 8.489

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

11.000

pana la 3500 intre 3500 si 7500 intre 7500 si 16000 >16000

Iunie 2015Ianuarie

2016

Februarie

2016

Martie

2016

Aprilie

2016Mai 2016 Iunie 2016

Total 4.240 5.785 5.824 6.537 6.234 6.155 6.229

pana la 18 locuri 3.256 4.161 4.318 3.896 4.023 4.354 4.135

intre 18 si 40 locuri 4.590 5.831 5.071 6.777 8.061 5.639 5.933

>40 locuri 5.798 6.953 6.817 7.465 5.257 7.344 7.806

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

11.000

Total pana la 18 locuri intre 18 si 40 locuri >40 locuri

43


bonus/malus category BM

I.10. Home insurance

For voluntary home insurance, 2016 continued the downward trend. This reflects a lower activity in

terms of underwriting risks, the number of contracts newly concluded and gross premiums written,

recording in the first quarter of 2016 significant declines compared to the same period last year,

while gross claims paid have not fallen at the same pace.

Table 39 The dynamics of contracts and the volume of gross premiums written for voluntary home insurance

during 2012-2016 (quarterly)

Period

Number of

contracts in force

(pieces)

Number of contracts concluded

in the reporting period (pieces)

Gross premiums

written (RON)

Gross claims paid

(RON)

Q1 2012 4,061,395 629,138 119,088,708 14,580,222

Q1 2013 3,352,152 630,311 131,306,239 16,980,317

Q1 2014 2,285,812 468,916 87,733,256 12,987,067

Q1 2015 1,824,118 853,066 120,411,927 13,618,911

Q1 2016 1,304,663 319,397 72,591,841 11,871,399

Iunie 2015Ianuarie

2016

Februarie

2016

Martie

2016

Aprilie

2016Mai 2016 Iunie 2016

Total 3.027 4.638 4.614 4.848 5.237 4.671 3.458

pana la 18 locuri 2.648 5.424 5.552 5.930 5.981 5.409 3.017

intre 18 si 40 locuri 3.927 6.013 5.417 5.686 6.496 5.060 4.366

>40 locuri 3.571 3.112 2.972 3.162 3.123 3.066 3.210

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

11.000

Total pana la 18 locuri intre 18 si 40 locuri >40 locuri

44

Figure 33 Evolution of the number of contracts and the volume of gross premiums written for

Voluntary home insurance during 2012-2016 (quarterly)

Compulsory home insurance is illustrated by the activity results of the Insurance Pool Against

Disasters PAID. They show a slight improvement for most indicators: the number of contracts in

force at the end of the period increased by about 7.6% and gross premiums written grew by 16.34%.

Table 40 Evolution of compulsory home insurance

Period

Number of contracts in force

at the end of the reporting

period (pieces)

Number of new contracts,


period (pieces)

Gross premiums

written (RON)

Gross claims paid

(RON)

Q1 2012 496,270 34,298 2,237,967 73,827

Q1 2013 333,860 37,042 2,493,767 36,904

Q1 2014 1,085,078 386,408 32,822,850 234,934

Q1 2015 1,524,491 419,937 34,599,272 1,324,975

Q1 2016 1,640,783 469,927 40,254,018 326,490

0

20.000.000

40.000.000

60.000.000

80.000.000

100.000.000

120.000.000

140.000.000

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

4.500.000

T1 2012 T1 2013 T1 2014 T1 2015 T1 2016

Prime brute subscrise (lei)

Indemnizatii brute platite (lei)

Numar contracte in vigoare (buc.)

Numar contracte incheiate in perioada raportare (buc.)

45

Figure 34 Evolution of compulsory home insurance

For the home insurance market as a whole (compulsory and voluntary), the first quarter of 2016 saw

a decline in gross premiums written (approximately -27.20%) and in the number of new contracts,

while the number of contracts in force decreased by about 38%.

Table 41 Evolution of home insurance (compulsory and voluntary)

Period

Number of contracts in force at

the end of the reporting period

(pieces)

Number of new contracts,


period (pieces)

Gross

premiums

written

(RON)

Gross claims

paid (RON)

Q1 2012 4,557,665 663,436 121,326,675 14,654,049

Q1 2013 3,686,012 667,353 133,800,006 17,017,221

Q1 2014 3,370,890 855,324 120,556,106 13,222,001

Q1 2015 3,348,609 1,273,003 155,011,199 14,943,886

Q1 2016 2,945,446 789,324 112,845,859 12,197,889

0

5.000.000

10.000.000

15.000.000

20.000.000

25.000.000

30.000.000

35.000.000

40.000.000

45.000.000

0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

1.600.000

1.800.000

T1 2012 T1 2013 T1 2014 T1 2015 T1 2016

Prime brute subscrise (lei)Indemnizatii brute platite (lei)Numar contracte in vigoare (buc.)Numar contracte incheiate in perioada raportare (buc.)

46

Figure 35 Evolution of home insurance (compulsory and voluntary)

0

20.000.000

40.000.000

60.000.000

80.000.000

100.000.000

120.000.000

140.000.000

160.000.000

180.000.000

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

4.500.000

5.000.000

T1 2012 T1 2013 T1 2014 T1 2015 T1 2016

Prime brute subscrise (lei)Indemnizatii brute platite (lei)Numar contracte in vigoare (buc.)Numar contracte incheiate in perioada raportare (buc.)

47

II. INSURANCE AND/OR REINSURANCE BROKERS

According to data centralized on 31 March 2016, a total of 331 insurance and/or reinsurance brokers

conducted the activity of intermediation in insurance and/or damage settlement.

II.1. Insurance intermediation business

In the first three months of 2016, the premiums intermediated by insurance brokers (RON

1,539,935,313) accounted for 65.05% of gross premiums written by insurers. Compared to the

similar period of 2015, there was an increase by 19.26% in premiums intermediated for both

categories of insurance.

Premiums intermediated for general insurance amounted to RON 1,501,201,350, accounted

for 97.48% of total premiums intermediated and the intermediation degree was 75.36%.

Premiums intermediated for life insurance, in the amount of RON 38,733,963, had an

intermediation degree of 10.32%.

Table 42 Insurance intermediation degree

Period Intermediated premiums (RON) Intermediation degree (%)

Total GI LI Total GI LI

31.03.2012 829,147,579 802,588,157 26,559,422 38.29 46.29 6.150

31.03.2013 965,271,666 934,164,565 31,107,101 45.39 54.72 7.41

31.03.2014 1,120,775,625 1,092,584,190 28,191,435 53.86 64.32 7.37

31.03.2015 1,287,316,779 1,255,418,013 31,898,766 57.82 69.16 7.76

31.03.2016 1,539,935,313 1,501,201,350 38,733,963 65.05 75.36 10.32

Analyzing the structure of premiums intermediated by insurance brokers on classes of general

insurance, it is noticed that, in the first quarter of 2016, a significant share in total premiums

intermediated for general insurance (RON 1,539,935,313), was held by the following classes:

1. class A10. Motor vehicle liability insurance (MTPL+CLI) accounts for 58.95% (RON 884,953,283);

2. class A3. Land vehicles insurance (Casco) accounts for 19.45% (RON 291,988,986);

3. class A8. Insurance against fire and other natural disasters accounts for 9.12% (RON 136,873,343);

4. other classes held a share of 12.48% (RON 187,385,738) of total general insurance premiums

intermediated.

48

Figure 36 Structure on general insurance classes of premiums intermediated on 31 March 2016 (%)

Figure 37 Structure on general insurance classes of premiums intermediated on 31 March 2015 (%)

Analyzing the structure of premiums intermediated by insurance brokers on classes of life

insurance, it is noticed that, in the first quarter of 2016, the largest share is held by the following

classes:

1. class C1 "Life insurance, annuities and supplemental life insurance", amounting to RON

32,881,975, respectively 84.89% of total premiums intermediated for the life insurance

category;

2. class C3 "Life insurance and annuities related to investment funds (unit-linked): RON

3,488,846, respectively 9.01% of total premiums intermediated for the life insurance

category;

The other life insurance classes accounted for 6.01% of total premiums intermediated.

49

Figure 38 Structure on life insurance classes of premiums intermediated on 31 March 2016 (%)

Figure 39 Structure on life insurance classes of premiums intermediated on 31 March 2015 (%)

087

006007

Clasa C1 Clasa C3 Altele

50

Table 43 Top 10 insurance brokers, depending on premiums intermediated

No. Broker

name TOTAL LI TOTAL GI

TOTAL

LI + GI

Market

share (%)

1 SAFETY BROKER DE ASIGURARE S.R.L. 266,629 123,333,729 123,600,358 8.03%

2 MARSH - BROKER DE ASIGURARE-REASIGURARE S.R.L. 3,188,758 109,793,823 112,982,581 7.34%

3 TRANSILVANIA BROKER DE ASIGURARE S.R.L. 143,355 91,467,652 91,611,007 5.95%

4 DESTINE BROKER DE ASIGURARE-REASIGURARE S.R.L. 1,042,478 72,034,020 73,076,498 4.75%

5 INTER BROKER DE ASIGURARE S.R.L. 130,801 70,172,641 70,303,442 4.57%

6 DAW MANAGEMENT - BROKER DE ASIGURARE S.R.L. 8,782 62,222,585 62,231,367 4.04%

7 CAMPION BROKER DE ASIGURARE S.R.L. 1,387,937 50,154,056 51,541,993 3.35%

8 UNICREDIT INSURANCE BROKER S.R.L. 228,775 40,785,897 41,014,672 2.66%

9 AON ROMANIA BROKER DE ASIGURARE - REASIGURARE

S.R.L 709,497 33,490,703 34,200,200 2.22%

10 PORSCHE BROKER DE ASIGURARE S.R.L.

33,871,868 33,871,868 2.20%

Total (1-10) 7,107,012 687,326,974 694,433,986 45.10%

Total 38,733,963 1,501,201,350 1,539,935,313 100.00%

II.2. Revenues obtained from the insurance intermediation business

Revenues obtained from the insurance intermediation business, according to quarterly reports sent by

350 insurance brokers for 31 March 2016, recorded a value of RON 262,554,773, in nominal growth by

9.37% compared to the same period of 2015 (RON 240,063,726).

Table 44 The evolution of intermediation revenues

Period

GP

W

(R

ON

)

Int

er

me

dia

ted

pre

mi

um

s

(R

ON

)

Re

ve

nu

es

fro

m

the

int

er

me

dia

tio

n

bus

ine

ss

(R

ON

)

Int

er

me

dia

ted

pre

miu

ms

/GP

W

(%)

31.03.2015

2,2

26,

27

3,5

92

1,2

87,

31

6,7

79

24

0,0

63,

72

6

57.

82

%

51

31.03.2016

2,3

67,

38

7,5

50

1,5

39,

93

5,3

13

26

2,5

54,

77

3

65.

05

%

The structure of revenues obtained from the insurance intermediation business, according to

reports sent by insurance brokers, for 31 March 2016:

a) revenues from the negotiation of insurance contracts, recorded a value of RON 257,095,843,

increasing compared to the similar period of 2015 by 9.55%;

b) revenues from risk inspections, amounting to RON 5,028, up 100% compared to the previous

period of 2015;

c) revenues from damage settlement, amounting to RON 3,918,646, down 0.08% compared to the

similar period of 2015;

d) revenues from damage inspections, amounting to RON 47,019, down 77.33%, compared to the

same period of 2015;

e) revenues from other activities in relation to the line of business, amounting to RON 1,493,265, up

19.97% compared to the same period of 2015.

52

List of figures

Figure 1 The evolution of gross premiums written in 2012 – 2016 ................................................................... 4

Figure 2 GPW distribution for general insurance in the 8 regions of development of Romania ........................ 6

Figure 3 GPW distribution for life insurance in the 8 regions of development of Romania .............................. 6

Figure 4 Evolution of the volume of gross premiums written on general insurance classes (million RON) ....... 9

Figure 5 Structure dynamics on general insurance classes ............................................................................. 10

Figure 6 Structure dynamics on life insurance classes .................................................................................... 11

Figure 7 Evolution of the volume of gross premiums written on life insurance classes (million RON) ............ 12

Figure 8 The evolution of the gross claims paid including maturities and redemptions for general and life

insurance (million RON) ......................................................................................................................... 13

Figure 9 Structure dynamics on classes of gross claims paid for the general insurance category ................... 15

Figure 10 Evolution of the volume of GI gross claims paid (million RON) ....................................................... 15

Figure 11 Quarterly evolution of claims ratio and combined claims ratio for the main general insurance

classes during 2014-2016 (Q1 of each year) ........................................................................................... 17

Figure 12 Quarterly evolution of the value of acquisition and administration expenses and expenses with

commissions during 2014 - 2016 (first quarter) ..................................................................................... 18

Figure 13 Evolution of expenses with commissions in gross premiums written ............................................. 19

Figure 14 Additional requirement of capitalization following the move to SII ............................................... 25

Figure 15 Additional capitalization resulting from the move to Solvency II .................................................... 25

Figure 16 The evolution of total assets and liabilities of insurance companies .............................................. 26

Figure 17 The evolution of Solvency Capital Requirement (SCR) and Minimum Capital Requirement (MCR) . 26

Figure 18 The evolution of eligible own funds to cover the solvency capital requirement ............................. 27

Figure 19 The structure of eligible own funds to cover SCR (D1) .................................................................... 27

Figure 20 The structure of eligible own funds to cover SCR (31 March 2016) ................................................. 28

Figure 21 The distribution of insurance companies depending on SCR/MCR rate on 31 March 2016 ............. 28

Figure 22 The evolution of gross premiums written for MTPL during 2010-2015 ........................................... 30

Figure 23 The evolution of gross premiums written for MTPL quarterly during 2015-2016 ............................ 30

Figure 24 Degree of concentration of the MTPL market ................................................................................. 34

Figure 25 The quarterly evolution of MTPL claims paid on bodily injuries (in thousand RON) ........................ 34

Figure 26 The quarterly evolution of MTPL material damages (in thousand RON) ......................................... 35

Figure 27 The evolution of the average premium and average claim during 2010-2015 ................................. 36

Figure 28 The evolution of the average premium and average claim during 2015-2016 - quarterly ............... 36


category B0 ........................................................................................................................................... 41


category BM .......................................................................................................................................... 42


bonus/malus category B0 ...................................................................................................................... 42


bonus/malus category BM .................................................................................................................... 43

Figure 33 Evolution of the number of contracts and the volume of gross premiums written for voluntary

home insurance during 2012-2016 (quarterly) ....................................................................................... 44

Figure 34 Evolution of compulsory home insurance ....................................................................................... 45

Figure 35 Evolution of home insurance (compulsory and voluntary) ............................................................. 46

Figure 36 Structure on general insurance classes of premiums intermediated on 31 March 2016 (%) ........... 48

Figure 37 Structure on general insurance classes of premiums intermediated on 31 March 2015 (%) ........... 48

Figure 38 Structure on life insurance classes of premiums intermediated on 31 March 2016 (%) .................. 49

Figure 39 Structure on life insurance classes of premiums intermediated on 31 March 2015 (%) .................. 49

53

List of tables

Table 1 Dynamics of allocation on insurance segments during 2012 - 2016 ..................................................... 4

Table 2 Dynamics of gross premiums written on insurance classes in the period 2012 - 2016 ......................... 4

Table 3 The companies with the largest volumes of gross premiums written and their share in total market

(general and life insurance) ..................................................................................................................... 7

Table 4 Ranking of insurance companies based on gross premiums written for general insurance in the first

quarter of 2016 ....................................................................................................................................... 8

Table 5 Structure on general insurance classes ................................................................................................ 9

Table 6 Ranking of insurance companies based on gross premiums written for life insurance in 2016 .......... 10

Table 7 Structure on life insurance classes ..................................................................................................... 12

Table 8 The dynamics of the gross claims paid, including maturities and redemptions for general and life

insurance, during 2012-2016 ................................................................................................................. 13

Table 9 Insurance companies with the largest volume of gross claims paid for general insurance ................. 14

Table 10 Insurance companies with the largest amount of gross claims paid, maturities and redemptions for

life insurance ......................................................................................................................................... 16

Table 11 Quarterly evolution of claims ratio and combined claims ratio for the main general insurance

classes ................................................................................................................................................... 18

Table 12 Quarterly evolution of the value of acquisition and administration expenses and expenses with

commissions during 2014 - 2016 (first quarter) ..................................................................................... 18

Table 13 Evolution of expenses with commissions in gross premiums written in the period 2014 - 2016 (first

quarter) ................................................................................................................................................. 19

Table 14 Structure of gross technical reserves for general insurance on 31 March 2016 compared to 31

December 2015 ..................................................................................................................................... 20

Table 15 Structure of gross technical reserves for the life insurance category, on 31 March 2016 ................. 21

Table 16 Structure of gross technical reserves for the life insurance category, on 31 December 2015 ........... 21

Table 17 Liquidity ratio for each of the insurance categories on 31 March 2016 ............................................ 21

Table 18 Liquidity ratio for each of the insurance categories on 31 December 2015 ...................................... 22

Table 19 The evolution of GPW and net reinsurance premiums during 2012-2016 (first quarter) for GI ........ 22

Table 20 The evolution of GCP and net reinsurance GCP during 2012-2016 (first quarter) for GI ................... 22


2016 (first quarter) for GI ...................................................................................................................... 23

Table 22 The evolution of GPW and net reinsurance premiums during 2012-2016 (first quarter) for LI ......... 23

Table 23 The evolution of GCP and net reinsurance GCP during 2012-2016 (first quarter) for LI .................... 24


2016 (first quarter) for LI ....................................................................................................................... 24

Table 25 The evolution of gross premiums written for class A10 (MTPL+CLI) ................................................. 29

Table 26 The pace of change of MTPL market indicators from quarter to quarter during 2015-2016 ............. 30

Table 27 Number of contracts on natural and legal persons .......................................................................... 31

Table 28 The share of the number of contracts concluded in the period in total contracts depending on the

contracted period - quarterly 2015-2016 ............................................................................................... 31

Table 29 The share of the number of contracts concluded in total contracts depending on the contractor

(natural or legal person) -quarterly 2015-2016 ...................................................................................... 32

Table 30 Ranking of insurance companies based on gross premiums written for MTPL in the first quarter of

2016: ..................................................................................................................................................... 32

Table 31 Evolution of market shares recorded on MTPL for 2011-2015: ........................................................ 33

Table 32 The evolution of technical reserves quarterly during 2015 - Q1 2016 (thousand RON) ................... 35

54

Table 33 The situation on companies of claim files paid in Q I 2016 (the current year and the previous years)

.............................................................................................................................................................. 35

Table 34 The average premium annualized in RON at market level in the last consecutive 5 quarters .......... 37

Table 35 Detailing the method of calculation of the average premium for Q1 2016 ...................................... 37

Table 36 The evolution of average claim for natural persons during 2015-2016 ............................................ 38

Table 37 The evolution of average claim during 2015-2016 ........................................................................... 38

Table 38 The evolution of average claim per total during 2015-2016 ............................................................. 39

Table 39 The dynamics of contracts and the volume of gross premiums written for voluntary home insurance

during 2012-2016 (quarterly) ................................................................................................................. 43

Table 40 Evolution of compulsory home insurance ........................................................................................ 44

Table 41 Evolution of home insurance (compulsory and voluntary) ............................................................... 45

Table 42 Insurance intermediation degree .................................................................................................... 47

Table 43 Top 10 insurance brokers, depending on premiums intermediated ................................................. 50

Table 44 The evolution of intermediation revenues ...................................................................................... 50

evolution of the insurance market in the 1st …

Documents