Adrian Gheorghitae
The insurance sector as a whole, as the regulator notes, was characterized in the first quarter by growth of assets, capital and technical reserves compared to the end of the previous year. However, the average values of the solvency ratio and liquidity ratio decreased since the beginning of the year – both for general and life insurance. The value of liquid assets amounted to 3,246.3 million lei, occupying the largest share (58.3%) of the total assets of insurance companies. This indicator remained practically unchanged.
Gross premiums increased. During the first quarter of 2025, insurance companies accrued gross premiums worth 740.2 million lei, which is 10.6% more than a year earlier. Only for general insurance – more by 70.5 million lei, or by 11.0%. At the same time, net profit decreased twice compared to the same period last year.
At the level of the whole insurance market, the result of activity for the first quarter recorded a net profit of 37.5 million lei, which is by 40.5 million lei, or by 52% less than in the same period of 2024. Decrease in profitability is shown by all companies, while three market players out of 9 operating companies recorded losses on the results of activity in the first quarter of 2025.
IC ASTERRA GRUP SA ended the quarter with a net loss of 3.3 mln lei, while IC TRANSELIT SA (-2.2 mln lei) and IC ACORD GRUP SA (-160 ths lei) were also market outsiders. At the same time, the regulator notes a decrease in the return on equity of the companies, which amounted to 8%, which is 8.6 p. p. less than in 2024. Return on assets (ROA) amounted to 2.7%, down by 2.8 p.p.
Experts, in the absence of a more detailed analysis of the insurance market, see the reason in a number of factors. Since the profitability of the market of intermediaries in the sale of insurance products has increased, as well as fees, the reasons may lie in the tightening of norms of reserving funds, solvency of insurance companies. And also in unsuccessful investment activities of insurers, as the combined operating ratio, reflecting the ratio of fees to expenses, has increased.
“Despite the fact that the main prudential indicators are in a more than comfortable zone in terms of financial stability, the dynamics of the combined operating ratio attracts special attention. For a number of types of insurance it exceeds 100%, – says Adrian Georgitsa, vice-chairman of NCFM. – This indicates the presence of losses in the relevant lines of business. Accordingly, the efficiency of the applied business models comes into question.
Experts urge to be more attentive to the adaptation of underwriting and risk management policies, while maintaining high standards of loss settlement. Thus, the gross operating income rate for foreign liability insurance (Green Card) amounted to 100.2%, increasing by 6.9 p. p. compared to the previous year’s average. And the average amount of insurance indemnity under the insurance “Green Card” increased and amounted to about 85 thousand lei per vehicle unit.
Besides, the profitability of some investment instruments is falling. The most significant assets, allocated by companies to cover technical reserves and minimum capital requirements, are held in SS – 64.9% (about 3 billion lei).
Adrian GEORGICE, NCFM Vice Chairman:
– The development of the insurance sector in the first quarter of 2025 confirms the maturity of the market, including through the expansion and professionalization of intermediation channels. The degree of intermediation reached 65%. The growth in the volume of gross written premiums by more than 10% reflects not only the increasing demand from households and businesses, but also confidence in the products and services provided by insurance companies.
Out of the total amount of insurance payments in the first quarter – 174.7 million lei, or 56%, were made up of damage payments under CMTPL insurance (internal and external), which is by 27.3 million lei or 18.6% more than in the first quarter of the previous year. Payments for internal MTPL insurance amounted to 138.4 million lei (+18.6%), for external insurance “Green Card” – 36.3 million lei (+18.3%).
