Insurance Around The World


The Romanian insurance market dates back to the early part of the 18th century after a series of mutuals were set up to offer protection.

These organisations developed across Transylvania and offered businesses and consumers a way to take out policies that provided security against a range of problems, such as houses being damaged by fires. Following on from the Treaty of Adrianopole in 1829, transport, fire and life insurance products were all established, while in 1848 the General Institute of Pensions was founded and this provided its members with an annual pension.

The first Romanian insurance company was founded by a royal law in 1871 and from here on, the industry developed steadily until the world wars during the first half of the 20th century. Between 1948 and 1990, the industry was state-owned, but a competitive environment was re-introduced after this and it has flourished ever since. UNSAR was established in 1994 to act as the industry’s professional association.

Romanian insurance industry

The Financial Supervisory Authority is the regulator of the insurance industry. Its latest report showed that the gross written premiums for both non-life and life insurance amounted to 8.2 trillion Romanian New Lei (£1.2 trillion) at the end of 2012. This represented a marginal increase of 0.58 per cent real terms on 2011’s figures.

What the data confirmed is that the country’s insurance industry is still heavily reliant on motor insurance. This sub sector was responsible for 63 per cent of gross written premiums for non-life insurance, underlining just how important a role this type of cover plays. There is also a high concentration within the market, as almost 80 per cent of premiums were generated by only ten companies in 2012. This is despite the fact there are 41 organisations active in the insurance/reinsurance sector.

The reinsurance sector

Reinsurance activity has been undertaken in both the domestic and international markets as companies look to balance their financial statements and underwrite any additional risks. During 2012, there were 28 insurance firms that completed reinsurance agreements in the non-life sector, dropping to 19 for the life insurance sector.

In general, there has been a significant increase in the reinsurance sector in recent years as it has become an increasingly established practice in non-life businesses. Proportional treaties, such as quota share or surplus reinsurance, continue to be popular as companies look to manage risks, maintain solvency requirements, streamline income and increase underwriting capacity.

Brokers in Romania

The Brokers’ Association is a professional organisation that represents 49 members and it seeks to protect their interests in the capital market authority. As with many other national markets, insurance brokers represent one of the major distribution channels. A report published by the Annales Universitatis Apulensis Series Oeconomica found that brokers are set to play an increasingly large role in the Romanian insurance industry. This is in part because of brokers’ ability to react to the recent economic conditions, which lead to the evolution of gross intermediated premiums.

Moreover, the greater presence of brokers means consumers are increasingly familiar with the role of these professionals and the benefits they can offer. As people seek to buy the cheapest products, brokers have an important job; ensuring adequate protection at competitive prices.

“The insurance brokerage [market] will face some challenges, but this can be a starting point for achieving high quality activities and an increase of the brokerage market,” the paper stated.