Life insurance companies prepare for another difficult year

Life insurance companies, which saw their business fall for the first time last year, by 10% on the overall market, are preparing for another difficult year, with the market expected to either stagnate or see a slight rise in 2010.

Over the last ten years, 2008 excluded, life insurance sales only recorded rises, mostly double-digit ones, with last year's decline coming amid an increase in the unemployment rate, cuts in employees' benefit budgets, and the collapse of lending.

"I expect the insurance market to grow by 5% in 2010, but it will be more difficult for the life insurance market because it has to make up for last year's decline. I expect life insurance to amount to the 2008 level in 2010," said Angela Toncescu, chairperson of the Insurance Supervisory Commission (CSA). In 2008 overall premiums underwritten on the life insurance market amounted to 1.87 billion RON (508 million euros).

The CSA chairperson says this year clients will focus on traditional life insurance policies, where the insured does not carry the investment risk.