ASF Report: Insurance companies paid gross compensations of 2.6 billion lei in quarter one

The total value of gross compensations paid by insurance companies (subsidies included) exceeded 2.6 billion lei, in the first three months of 2024, of which 80% represent gross compensations paid for the activity of general insurance, while 20% were for life insurance, according to the evolution of the insurance market in Romania released last week.   According to the document, about the solvability of insurance companies authorized and supervized by ASF, instalments at insurance market level were high at the end of March 2024. Compared to the same period of 2023, SCR instalment was slightly lower, on the background of a more rapid increase of the demand of solvability capital (+27%), compared to the dynamic of funds eligible to cover the demand for solvability capital (+25%). However,compared to the end of 2023, there is a slight improvement of solvability, the SCR instalment recording a3% increase.   At the same time, liquidity for the general insurance activity is at a relatively similar level with the one recorded at the end of 2023, while the indicator grew in the case of life insurances. In context, the improvement of liquidity for life insurances took place on the background of the 11% increase of liquid stock, while short term bonds grew by 4% from one year to the other.   The net profit of insurance companies at the level of the whole market continued to grow in 2023, a tendency manifested since 2021, the main influence being the increase of mandatory car insurances, best represented in the Romanian insurance market, the report shows. On that background, insurance companies recorded a total net profit of 940 million lei, on the rise by 22% against 2022.   The total volume of gross compensations paid exceeded 2.6 billion lei, in the first three months of 2024, 80% of which represent gross compensations paid for the general insurance activity, while 20% are for life insurances.   The total value of insurance company investments (including stock held for unitlinked) amounted to 28.7 billion lei, on the rise by 6.5% aaginst the end of 2023. ASF points out that insurance companies in Romania invest mainly in fixed income instruments, mainly in government bonds, which hold a share of 65% in the total value of investments on March 31, 2024.   In quarter 1, 2024, the investment share in government bonds has grown by 2% in total investments, on the background of a 10% increase of investments in state bonds. Also, the value of technical reserves, according to Solvability II regime, was 19.75 billion lei, on the rise by 37% against the same period of 2023.   The positive dynamic was backed by the increase of the value of technical reserves for the general insurance activity (+49%), and the increase of the value of reserves set up for life insurances (+23%). Of the total value of technical reserves, 57% are set up for the activity if general insurances, and 43% for life insurances.   Data included in the specialty report points out the fact that the value of premiums distributed by brokerage companies for general and life insurances went up by 0.6% on the background of the increase of the volume of premiums distributed for both segments (general insurance of + 0.3% and life insurance of + 10.8%). In the period of time analyzed, brokerage companies distributed 75% of the total volume of gross premiums subscribed by insurance companies, the highest share being held by general insurances (89%).   At present, there are 25 companies authorized by ASF in the Romanian insurance market to carry out activities in the field, while 15 branches carry out activities based on the Freedom of Establishment right.