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Romania's insurance market could lose 5-10% on the unit-linked segment this year, insurer estimatesUpdated: 16-06-2009 |
Romania's unit-linked insurance market could drop by 5-10 percent this year, while the life insurance segment may win 1-2 percent, predicts Generali Asigurari, the Romanian unit of Italy's bigger insurer Assicurazioni Generali Spa.
Ovidiu Racoveanu, life insurance director with Generali Asigurari, explained that consumers are now focusing more on traditional products and less on products with stock exposure. With unit-linked policies, insurance companies place a large amount of the premiums written in funds, but the risk is taken on by the client, as he is the one picking the fund. The incertitude and risk aversion increased as the capital market and financial instruments based on stock market placements were strongly hit by the crisis.
The unit-linked segment stood last year at about 520 million lei.
Racoveanu advices insurance companies to explain to their clients that by giving up policies they give up protection and to suggest partial buy-backs or policies loans. He added that it is preferable to reduce premiums written or to postpone a contract than to annul it.
Unit-linked products weighed 29 percent of all the insurance market during the first quarter of the year.
Generali also estimates that the life insurance segment could gain 1-2 percent in 2009, less than it did in 2008, as companies saw their revenues and their staff severely reduced.
The life insurance market grew last year by 24.11 percent, to 1.8 billion lei, making for 20.5 percent of the whole market.
Racoveanu also predicted that the market could swell by 50-80 percent if the deductibility margin is set at 300-400 euros for the employer.
He stressed that Generali Asigurari could see gross premiums written for life insurance policies rise by 10 percent this year and that the company was not very badly hit on the unit-linked segment either.
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