Foreign rival companies will make an aggressive entrance not just in the insurance or brokerage sectors, but in all the segments of the financial market: banks, private pensions, mutual funds, believes Theodor Alexandrescu, the manager of AIG Life, the second biggest life insurance firm in Romania in terms of gross underwritten premiums.
In the first two weeks of January, more than 20 insurers of Europe announced their entrance through notification on the Romanian market, and 10 insurance brokers announced the same last week. Why is it that so many insurance companies have entered the Romanian market so rapidly?
"Because a rising number of companies prefer to benefit from the size of domestic companies to expand directly," explains Alexandrescu.
"When an increasing number of companies will come to sell policies in a country without settling there through a distinct company, we will see competition emerging between ruling bodies-who offers the best conditions for a company to settle in a country or another," explains Alexandrescu. Thus, some companies can simply withdraw from a certain country if licensing conditions are tough, operational costs be too high or supervision norms too restrictive.
How will these new companies arriving on the market operate?
"There will be marketing partnerships through brokers, banks or even through other insurance firms. All of them will come. What you've seen so far is just the beginning. The European market is governed by competition and free competition must be stimulated on the Romanian market, as well," explains Alexandrescu. However, unlike Poland, the Czech Republic or Hungary, the Romanian financial industry is not solid enough, and therefore the impact will be much more dramatic in our case than in the countries that joined the EU in 2004.
"We registered shrinking inflation and ongoing GDP gr
