Crisis reaches insurance market

Insurance companies have started seeing their turnovers tumble this year, by two-digit rates, after the market stagnated last year, and estimates for the end of 2010 are not upbeat at all. Cristian Constantinescu, chairman of UNSAR (Insurers' Professional Association), forecasts an over 10% market decline, but the Insurance Supervisory Commission (CSA) expects the market to stagnate. Most insurers last year posted one-digit declines or flat gross underwritten premiums, but the first quarter brought them turnover decreases by as much as 30%. "2010 is likely to be the most challenging year for the economy after '89, and first quarter insurance market figures are clearly showing the market moved in tandem with the economy. Recent events justify our forecasts that the situation will not improve in the following period. The steps announced by the government will hurt investments and consumption, which will delay market recovery," Constantinescu stated.