The insurance industry has been facing the challenge of surviving the financial crisis that has engulfed the entire economy. And for this year, Shaun Russell, the commercial director of Eureko, sees a stagnation in the market, and a return to profit as late as next year.
According to Eureko’s commercial director, Shaun Russell (photo), 2010 will see many insurance companies focused on customer retention, since the entire economy is expected to pick up at the end of the year.
“I expect the insurance market to mirror the general economic conditions, which means we’ll see a stagnation in 2010 and a return to growth in 2011. I hope an economic revival to take hold at the end of the year, which is why insurance companies should focus more on retaining existent customers”, said Shaun Russell.
Data from the Insurance Supervisory Commission (CSA) point to a 1.1% drop in insurance industry in 2009, from 8.83 billion lei. General insurance sector gained 2% to 7.21 billion lei, while life insurance premiums narrowed 13% to 1.62 billion.
However, Eureko representative hopes non-life sector to enjoy renewed growth this year. And one of the levers to stimulate the insurance market authorities should consider is the introduction of tax relief for insurance products to make them more attractive to Romanian clients.
But Eureko’s main business lines in Romania are life and health insurances, after divesting its auto, freight, and civil liability businesses in 2009.
In the life insurance sector, the company has a market share of 2%, which it plans to improve in the next few years.
In 2009, Eureko’s gross written premiums dropped 35% to 52 million lei (€12.27 million), from 80.439 million in 2008.
Of last year’s total GPW, life insurance sector accounted for 34 million lei, 10% down from 37.616 million lei in 2008, while general insurance segment attracted 18 million lei GPW, down 58% from 42.823 million lei a year earlier. Eureko Pensii reported 69 million lei in pension contributions.
“As for health insurances, we are glad to see we have made the first steps towards the long-awaited reform of the system. And the absence of a comprehensive reform in private insurance market is only delaying its development on a long-term”, Russell added.
On the other hand, the result of these legislative changes will increase the profitability of private health insurances on a long term.
Eureko has a market share of 34% in health insurance segment, and holds the leading position in this market.
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