Austria's VIG posts 28m-euro profit because of smaller claims

Vienna Insurance Austrian group, which controls Omniasig, Asirom, BCR Asigurări and BCR Asigurări de Viaţă companies domestically, last year reported gross income worth 28.5m euros from Romanian operations, up 18% from 2009.

The increase is mainly due to falling settled claims and lower operating expenses. The companies VIG holds in Romania in 2010 paid damages worth 325m euros, 16% less than a year before. Claims accounted for 62% in gross underwritten premiums.

"The claims rate fell by 4.9% last year in Romania reflecting the rising tariffs for car policies, the introduction of deductibles and the exchange rate impact," reads Austrian group's annual report.

Operating expenses fell by 11% and reached 152m euros. However, their weight in total underwritten premiums slightly increased to around 29% on the portfolio cleanup operations.

The Austrian group underwrote gross premiums worth 528m euros last year, down 13% year-on-year as a result of the lower sales of car policies. The decline tops the 5.7% slump the insurance market posted in 2010. However, VIG is still the biggest player in the Romanian insurance industry.