BMI's Executive Summary for the Romania Insurance Report

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This report differs from its predecessors in that it includes BMI's Insurance Business Environment Rating (IBER). The rating brings together a number of pieces of relevant quantitative data, together with BMI's Country Risk Rating (CRR). It is now much easier to consider the business environment for the insurance sector in any one country relative to the business environment for other industries in that country that are surveyed by BMI, and the business environment for the insurance sector in other countries.

Romania's IBER is 55.5. Relative to other countries in Central and Eastern Europe, it is very small insurance market for foreign insurers. Within the region, Romania stands out for the measure of openness of the non-life and life segments. The economic outlook is generally positive, although there are somepolitical uncertainties and a growing budget deficit. The IBER is held back by the very small size of the industry and low levels of expected growth and penetration of both the life and non-life sectors. It is also held back by the legal framework and bureaucracy and external risks.

Over the forecast period, we anticipate that non-life premiums will grow by 18% annually in local currency terms and by 18% in US dollar terms. Life premiums are expected to increase by 21% annually in local currency terms and by 21% in US dollar terms. The key drivers of growth in the non-life segment in 2008-2012 are the anticipated rise in nominal GDP from around US$155.50bn to US$226.01bn and an expected increase in non-life penetration from 1.68% of GDP to 2.60%. The key driver of growth in the life segment is the envisaged rise in life density from US$26.63 per capita in 2007 to US$70.00 per capita in 2012. Romania's total population is declining very moderately.

The Romanian non-life market is broadly similar to that of Hungary: extremely crowded, except it is more fragmented. A distinctive feature of the Romanian insurance market, as compared with neighbouring countries such as Bulgaria and Poland, is both the sheer number of local companies and the fact that none has a truly dominant position. The market is also small, making it not particularly attractive to cross-border firms. Nonetheless, the number of firms operating in Romania is amazing, given its small size.

The strengths of the sector lie in its relative openness to foreign players and Romania's overall excellent Regulatory Framework, Development and Competitive Landscape. The economy is growing strongly, and although growth will likely slow, it is likely to continue to grow at around 4-5% through the period 2008-2012.

The main weakness of Romania's insurance sector is the relatively low total size of the sector and the very low expected growth and penetration rates in relation to other countries in the Central and Eastern European region. There may also be threats from the global ‘credit crunch' and some political uncertainty.

Contents

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Chapter 1 - The Sector At A Glance

Table: Romania Overview

Key Features Of This Report – And Likely Future Changes

Chapter 2 - Latest News

Recent Developments

Chapter 3 - Evolution Since The Mid-1990s

Table: Romania Evolution of the Insurance Sector (in millions of currency specified)

Evolution

Chapter 4 - Projections And Forecasts

Table: Romania BMI Projections (in millions of currency specified)

Projections And Drivers Of Growth

Chapter 5 - Macroeconomic Outlook

Table: Romania - Economic Activity

Chapter 6 - Country Update

Political Risk – Foreign Policy Embarassment

Economic Risk – Twin Deficits

Business Environment – PHARE Play?

Table: Non-Life Segment – Rankings of Markets

Table: Presence of Non-Life Cross-Border Insurers

Table: Selected Local Non-Life Insurers

Country Overview – Romania – Life Segment

Table: Life Segment – Rankings of Markets

Table: Presence of Life Cross-Border Insurers

Table: Selected Local Life Insurers

Who’s who in the Central and Eastern European region?

Chapter 7 - Regional context

Table: Regional Context – premiums

Table: Regional Context – Total premiums

Chapter 8 - Methodology And Objectives

Introduction

Background

Forecasts

Chapter 9 - Appendix

Table: Latest estimates/ actual figures for 2005

Table: Latest estimates for 2010

Table: Latest estimates for 2005-2010

Competitive Landscape for Europe Insurance Reports: Sample of
    Companies Ranked

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A cross-border overview of key players and their insurance market share across Europe. Tables and graphs show country presence of multinationals across the region. Comparative company analyses and rankings by premium income (life and non-life). Company SWOTS for leading life and non-life insurers, covering network of offices, presence of foreign stakeholders, strategic relationships, joint ventures; portfolio of clients; diversity of product range; profit growth, investment strategy and risk exposure.

Network of Insurance Sources

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BMI's European Insurance Reports are based on an extensive network of multilateral organisations, government departments, insurance industry associations, chambers of commerce and company reports. Information sources include:

Read about our other Insurance Reports