French group Groupama, the biggest investor on the domestic insurance market that paid almost half a billion euros to buy Asiban, BT Asigurari and OTP Garancia in 2007 and 2008, posted a 12% decline in the underwritten gross premiums of the three insurers in the first five months to 361.7 million RON (85.4 million euros).
BT Asigurari and Asiban are now in the process of merging, which will be completed at the end of September, when Groupama Asigurari will emerge on the market, and will most likely become the third leading insurer. The new company will also absorb OTP Garancia by the end of the year, the smallest insurer of the three.
On the segment of general insurance, which accounts for the largest share of Groupama’s business, gross premiums underwritten fell by 8% to 327.6 million RON (77.4 million euros), according to unaudited results.
"The decline was caused by financial risk insurance, which fell at the same rate as the credits granted by banks. All the other insurance operations posted growth," Denis Rousset, chief executive of BT Asigurari and the local head of Groupama’s operations, told ZF in an interview.
Financial risk insurance consists of policies bought by banks or other financial institutions that cover debtor default risk.
Gross underwritten premiums from life insurance operations stood at 34.1 million RON (8 million euros) for the three companies from January through May, down 36% compared with the first five months of last year.
"The life insurance market is not in a very good position, because one third of it is made up of credit-related insurance, one third of traditional policies and one third of unit-linked insurance (tied to investment funds i.e.). Of these, only traditional insurance is growing now, but that is not enough to offset the decline of the other two categories," Rousset explains.
Still, he
