The introduction of the flat tax will take the insurance market toward 4-5bn euros in 2010, due to the higher volume of disposable income the population and companies will benefit from, estimates the chairman of the Insurance Surveillance Commission (CSA), Nicolae Crisan.
"The insurance industry is likely to grow to 4-5 billion euros in 2010, in line with the new estimates," states Crisan.
In the autumn of 2005, Crisan had forecast for the article on insurance included in "Romania 2010" ZF Yearbook that the market would reach 3 billion euros in 2010, but last year''s and this year''s faster than expected growth has changed prognoses.
In 2005, the insurance market amounted 1.22 billion euros, and for the level projected by CSA chairman to be reached, an average annual growth pace of around 40% is needed.
Last year, the market advanced at a pace of more than 40%, but this was also influenced by the growth of the domestic currency against the euro.
"The flat tax has left the population and companies with more money, so that they bought more insurance.
"According to statistics, life insurance increases in parallel with living standards, and last year living standards improved at a pace faster than initial estimations," the CSA chairman explains.
The life insurance market last year reached a value of 286 million euros, 55% higher in euros than in 2004, and Crisan believes the market will get to one billion euros by 2010. But against a market of 5 billion euros, does it mean there will be at least one company posting turnover above one billion euros? "Yes. We might have a company with turnover close to one billion euros," Crisan believes.
In 2005, the highest turnover was registered by Allianz-Tiriac, with 239 million euros in gross premiums underwritten, but the company expects turnover close to 290 million euros for this year.
The market will be driven forward by the growth of health insurance, as well as by the introduction of the compulsory home insurance, scheduled for next year.
Crisan also projects some major companies will set up offices on the markets of neighbouring countries in the near future, as it has happened in the case of companies operating in other industries, such as Mobexpert, Altex or BitDefender.
Insurance market players say a market worth 4-5bn euros in 2010 is an upbeat projection and that the introduction of the flat tax has not impacted the insurance market directly, but impacted the demand for loans, which has boosted sales of insurance related to credits.
The insurance market was last year significantly enhanced by life, car and home insurance, as a result of the increase of non-governmental lending.
angela.placinta@zf.ro
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