Insurance companies operating on the Romanian market are not afraid the direct entrance of the 25 European insurers will have a negative impact over their business, even though their number might get to 200 in the first year after EU integration.
"There are very many insurers that were just waiting for this moment to enter the market. Their impact on the market is quite difficult to assess because I don't know what they will do on the market and what insurance lines they will bring," says Tudor Moldovan, general manager with Generali. He believes European insurers will be able to gain significant market shares provided that they come with insurance lines that are not covered by Romanian insurers, yet. "If they come with products already present on the market, it's hard to believe they will have an impact. It is very much up to products, distribution network, customers, companies present on the market and portfolios," added Moldovan.
Dumitru Ceraceanu, ASIBAN general manager, is of the same opinion, but he warns, however, that Romanian players have to be on their guard about the competitive edges European insurers might have. "It's certain that presence on the market does not mean just presence. Though their market share will be small in the first year, this might change over the following years. They might have some pluses, such as a better IT system, a different know-how and policies we haven't covered," states Ceraceanu, who believes Romanian insurers' main competitive edge is they know the market, legislation and customers' behaviour better.
"It's true these notifications from insurers mean they will be able to sell directly, but we don't believe this is going to significantly change the structure of the market in terms of supply (...)," believes Marius Onofrei, PR manager with Allianz-Tiriac.
Starting January 1st, insurance companies holding a licence in any EU member state are able to directly sell insurance policies in Romania by sending a simple notification to Insurance Supervision Commission (CSA). In the wake of services market liberalisation, 25 European insurers announced their direct entry in Romania in the first 15 days of this year.
"Some of these insurers are firms handling multinationals' programmes. Until this year, they had a firm doing fronting for policies issued in their country of origin to be valid in Romania. All these firms registered so they may directly issue policies without further resorting to fronting in Romania," explains Mihnea Tobescu, AIG general manager. The future customers of these firms will be subject to additional risks since CSA cannot control the activities of foreign insurers.
Of the 25 firms that voiced their intention to operate in Romania, 15 are registered in the UK, 4 in Ireland, 4 in Germany, 1 in Austria and one in Gibraltar.
EU insurers
Starting January 1st, EU insurers can directly sell policies in Romania just by notifying CSA
25 EU insurers announced their direct entrance in Romania in the first 15 days of this year
Of the 25 companies, 15 are from United Kingdom, 4 from Ireland, 4 from Germany, one from Austria and one from Gibraltar
Their number may get to 200
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