Insurance brokers will come to account for 35% in policies sold on the Romanian insurance market in the next three years, believes Patrick Lucas, managing partner with Gras Savoye French insurance broker. The insurance brokers' share of the market is put at 20-25% of a market worth 1.6 billion euros in 2006 and the increase to 35% is likely to bring domestic brokers over 16 million euros more in fee revenues.
"Insurance brokers can play a significant role on this market and could reach a weight of 35% in the next three years given the considerable increase witnessed by brokers as part of the overall market in Poland," stated Lucas. Gras Savoye is one of the most important French insurance brokers, having posted turnover worth 461 million euros globally last year.
Taking into consideration the evolution of the French insurance market, Lucas believes auto insurance will continue to account for a significant share of the overall market though the growth drivers over the next three years will be life and health insurance.
"Domestically, insurance is a competitive market and you are going to see international companies getting more involved on the market owing to globalisation and Romania's being a EU member," he also says.
European insurers' rising interest in the Romanian market has been indicated by 66 EU companies notifying the Insurance Supervision Commission on their decision to directly operate from their country of origin in the wake of the Romanian financial market's deregulation.
Lucas believes culture is what is making the difference between the Romanian insurance market and those of West-European countries. "Romanians do not have a culture of insurance, but this will be shaped up as a rising number of multinationals arrive on the Romanian market," Lucas believes.
In his opinion, Romanian firms do not consider sealing several types of insurance as necessary at this moment, but this will change as they come to better understand the insured risks.
"In each country, the insurance culture changes at the moment certain types of insurance become compulsory as authorities want to protect consumers".
Set up in 1996, Gras Savoye Romania last year generated 1.1 million-euro turnover, up 30% from 2005, considering the French have only one office domestically.
"The first step in the development of Gras Savoye domestically was to attract Romanian investors in Bucharest, a step to be followed by countrywide expansion. I believe we will expand our operations outside Bucharest by late 2008," said Lucas. One of the French broker's strategies of expansion domestically envisages the acquisition of one or several Romanian insurance brokers, with the company permanently looking at opportunities.
The company handled insurance contracts worth 41 million RON in 2006, up 58% year on year.
Gras Savoye Romania
Set up in 1996, it generated turnover worth 1.1m euros in 2006, 30% higher than the level reached in 2005, considering the French have a single office domestically
Its first step domestically was to attract Romanian investors in Bucharest, to be followed by countrywide expansion
Handled insurance contracts worth 41m RON (11.6m euros) in 2005, up 58% against 2005, while the market rose by 33% last year
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