Competition toughens on insurance market

Competition between the two best performing players on the Romanian insurance market, Allianz Tiriac and Omniasig, toughened in the first half of 2008, with the difference between their respective market shares having halved from the year before, daily Ziarul financiar reports.
In 2007, Allianz Tiriac and Omniasig were set apart by a market share difference of 5%, a gap that diminished to 1.9% as of end-June 2008. Allianz Tiriac was controlling 17.3% of the market’s 2007 value of 2.15 billion euros, with a turnover of 371 million euros, while Omniasig, with a turnover of 265 million euros, held 12.3% of the market.
H1 2008 data with the Insurance Overseeing Board indicate that the market leader saw its market share dwindle to 15.8%, while the second best performing player, Omniasig, witnessed a rise of 13% in its market share. Allianz Tiriac deals in both non-specific and life insurance, while Omniasig specializes in non-specific insurance, particularly motor insurance.

“In the developed countries, insurance companies have reached some market shares and it is hard to outperform one another, but in Romania outperforming is still possible. In the end, it all depends on motor insurance strategy, because most of the business is done on this segment. The trend may nonetheless change in relation to the two players, according to the policies followed by them in the motor business. The market gap between the two is quite volatile,” CEO Bogdan Andriescu of EOS Risq insurance broker told daily Ziarul financiar.
Although market stand is important to companies, Romanian insurers say they are more often after profits than after market share.
The business of both Allianz Tiriac and Omniasig were among the most profitable in 2007 and the first half of 2008. In 2007, Allianz Tiriac posted a net profit of some 9.3 million euros, and H1, 2008 operational revenues of 5 million euros. As for Omniasig, its 2007 net profit stood at 12 million euros gross and at 5.4 million euros gross in the first half of 2008.
A breakdown by market shares of the remaining Romanian insures looks like follows: Asirom (9.09%); Asiban (6.85%); ING Asigurari (6.18%); Unita (6.12%), BCR Asigurari (5.77%); Astra (5.73%); Ardaf (4.93%) and Generali (4.80%). The local insurance market was worth 1.2 billion euros in the first half of 2008, up 22% from H1, 2007. Gross insurance premiums underwritten by insurers for non-specific insurance stood at 973.4 million euros, which was 80.8% of the total value of the market.

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