Insurers are preparing for first year of decline

Insurers could see the first market decline this year after last year the sector saw uninterrupted, two-digit growth, and attracted over one billion euros in investments from foreign financial groups which came onto the Romanian market via acquisitions, and which relied on the market's significant growth potential, which has been erased by the current market conditions. The main cause for decline on a market that exceeded 2.4 billion euros in 2008 is the large share of corporate clients, which are perhaps going through their darkest time, significantly cutting expenses, including insurance-related ones, and some are even going bankrupt. In the past, companies brought insurers more than two thirds of their businesses. "The value of gross premiums underwritten on the general insurance segment will see a decline in 2009 compared with 2008, mainly due to the reduction in the volume of new business on two of the main insurance segments - comprehensive insurance and insurance of goods and properties belonging to corporate entities," says Aurel Badea, executive manager of Allianz-Tiriac's general insurance division. Allianz-Tiriac is leader of the Romanian insurance market.