Competition on the life insurance market will become ever tighter after a rising number of financial groups voiced their intention of entering this segment.
The latest player to enter the market is Signal Iduna Asigurari de Viata, part of Germany's Signal Iduna group, which last week received the operating licence from the Insurance Supervision Commission (CSA). Groups Ergo (Germany), Aegon (the Netherlands) or Sogecap (France) has announced plans to enter the life insurance segment by yearend.
On this segment, investors prefer to develop projects from scratch, unlike on the segment of general insurance, where acquisitions are preferred. During December 2007-May 2008 period, 8 insurers were sold domestically, whilst the total value of deals revolved around 1bn euros. Of these, only one was specialised in life insurance, namely BCR Asigurari de Viata.
The main reason investors are attracted to Romanian life insurance is the market's growth rate, which accelerated over the past year, and the low weight in the overall insurance market. At the same time, life insurance is more profitable than general insurance. Most life insurers generated profit last year, while many general insurers logged losses or only saw marginal profits.
Last year, life insurers registered gross underwritten premiums worth 432m euros, which accounted for around 20% of the overall market, but specialists estimate this weight will rise to 40-50% in the future.
According to CSA data, the life insurance market witnessed faster growth last year, after the increase amounted to 26%, almost triple the 9.66% rate posted in the previous year.
Signal Iduna will target medium and high-income customers, both individuals persons and companies. The company has a 7m-euro share capital and is run by Sorina Niculescu, the former general manager of Omniasig Addenda. Signal Idu
