Aon broker: Competition on property insurance has cut prices by up to 20%

The very tight competition among insurance companies on the segment of property insurance for corporate entities has led to a 10-20% price decline for these policies over the last two years, according to Karina Rosu, general manager of Aon, one of the largest insurance brokers on the Romanian market, which works mainly with corporate clients.

"The property insurance market is very competitive now, much more competitive than some of the Western European markets. Competition among insurers is tight on this segment because this is a profitable business line, there have not been many big claims, so they can afford to offer low prices and low deductibles (a deductible is the share of the claim payable by the insured party if the insured risk occurs). There has been a 10-20% decline in fees over the last two years, especially for very high risks, with insured sums amounting to tens or hundreds of millions of euros," Rosu explains.

Aon (formerly KaRo), the local subsidiary of the American insurance broker by the same name, recorded a 25% increase in insurance contracts brokered, with the value of brokered premiums amounting to 74 million RON (17.7 million euros).

"The fact that 2008 was a good year showed in the first half of this year, but in the second half, we expect our increase to be more moderate, in line with activity in the economy," says Aon's general manager. The company's revenues derived from commissions climbed by 15% in the first six months of the year, to 6.3 million RON (1.5 million euros).

"The structure of our portfolio remained similar to last year's. Motor insurance accounts for a rather significant share of our portfolio because this is a characteristic of the market. We grew on the property segment because we have been involved in a few large infrastructure projects. I think this will be the main development area in the future, because there are projects that have already been started or are at a tender stage, and insurance brokers are needed in such cases, considering that we are talking about complex policies."