The number of insurance brokers registered with the Insurance Supervision Commission (CSA) currently stands at 348, up 24% against late 2005, as a result of the progress the insurance market has registered in recent years.
"I worked with ING for ten years as a unit manager and I thought it was time for me to open my own business, counting on the expertise I'd accumulated until then," says Iuliana Diaconu, general manager with Fehu insurance brokerage, set up last autumn with a share capital of 25,000 RON (7,100 euros).
Diaconu is one of the 67 entrepreneurs who decided to set up an insurance brokerage in 2006 and chose that very moment because the market is growing and is yet untapped into in many respects.
"At present, the market is focusing on auto liability (RCA) and comprehensive auto insurance (CASCO), but the insurance domain is much vaster and allows one to sign much more types of insurance contracts than the ones dominating the market," explains Diaconu, who specifies EU integration was another factor that prompted him to open his firm in 2006. "Another EU integration benefit is that we'll be able to work with foreign insurers to offer a complete range of products," added Fehu general manager.
Insurance brokers are independent legal entities specialised in insurance intermediation, who represent the interests of insured/reinsured customers for whom they buy policies, though they receive fees from insurers. Pursuant to the current legislation, the minimum share capital needed to open an insurance brokerage stands at 25,000 RON. Cristian Ile, general manager of Exa insurance brokerage, also counted on his ten year experience in insurance when he decided to open his business in April 2006. Exa works with 13 insurance firms and sells general and life insurance to individuals and legal entities.
Cristian Fugaciu, the general manager of Marsh insurance brokerage, with turnover worth 28 million euros and income of 0.8 million euros in 2005, believes the main factor behind the rising number of insurance brokers is the more than 30% growth rate the insurance market posted in 2006. "Starting 2007, though, the number of brokers will decrease and their weight within the overall insurance market will rise. This is a normal tendency given that customers will be more educated (...)," explained Fugaciu. According to him, insurance policies sold by brokers account for 20% in the insurance market, namely 324 million euros.
In the opinion of Bogdan Andriescu, chairman of the National Union of Insurance Brokerage and Consulting Firms in Romania (UNSICAR), brokers held 25% of the insurance market, namely 410m euros in 2006.
"I do not believe there will be major changes on the market in the wake of EU integration since we've adopted most EU stipulations in the insurance domain (...)," states Andriescu.
Insurance brokers
Are independent legal entities specialised in sourcing insurance
Represent the interests of insured clients, unlike insurance agents who represent insurers' interests
Buy insurance for their customers
Are paid by insurers through fees
Charge fees between 10% and 40%
Are experts in insurance, unlike insurance agents
Seal 20-25% of insurance policies signed on the Romanian market
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