Romanian Life Insurance Market

Trends for 2008

Bram BoonHead of Life Insurance Working Group, UNSAR

February 11th 2007CFA Forecast Dinner Bucharest

Last Year in Numbers

42 Insurance Companies registered by the Insurance Supervisory Commission (end of 2007)

23 Ins. Co. members of UNSAR (~ 95% of the market)

~ 400 Romanian Insurance BrokersForeign capital of the Insurance Companies ~ 90% (big international players)

Total GWP ~ 2 Billion Euro (estimation for 2007) Non-life insurance ~ 81%

motor insurance more than 50% from total GWP & increasing the loss ratio

Life insurance ~ 19% Penetration % GDP ~ 1.75 %Insurance density ~ 92 Euro/capita

The Life Insurance Market Marked by the Launch of the Pension System

Substantial differentiation of product range as result of private pension launch

Life insurance market reported a good increase, but nevertheless under the evolution of non-life market

First year of the EU accession: 10 companies notified CSA of their intention to conduct life insurance activities in Romania, based on the free circulation of services

Life Insurance Market Consolidation in 2007

In 2007 it became more clear the consolidation of the life insurance market

4 important acquisitions took place: Vienna Insurance Group acquired 98.5% of Asirom Groupama acquired BT Asigurari PPF Investments acquired Ardaf and RAI Asigurari

Uniqa took control of the majority share capital from Astra Life percentage in total insurance market decreased from 23% in 2005 to 19% in 2007The life insurance market registered a growth below the growth pace of the non-life insurance => life insurance was sold with less effort, but focus was on P2Competition increased; lower differences in market share between competitors as all life insurance companies took advantage of the Pension reform

General Trends for Life Insurance in 2008

Demand for life insurance will be fuelled by Economic performance and capital inflow EU accession impact Changes in the legal, social and corporate sphere: begin

of development of the employee benefits market

Gradually evolution from consumption driven society to savings oriented

Life insurance to reach close to 3 billion lei by the end of 2010

Life insurance share on the insurance market to reach 25% by 2010

2008 – The Year of Life Insurance and Voluntary Pensions

2008 will be the year of the Voluntary Pensions and Life Insurance Growth in income and development of

middle class Beginning of transfer of social

responsibility in the private sector: private pensions, health system, education

Private pensions to increase awareness on life insurance

Traditional

life

Unit

linked

Pension

fundsMutual

funds

Single

premium

Term

life

Next step: retirement services

Benefits of the Multi-pillar SystemHelps individuals to become self-reliant in old ageReduces financial liability for governmentsRelieves financial obligations for younger generationsShifts responsibility from the state to employers and employees Acceleration of economic growthBoost of the local capital market

22

28

10 63 57

0

10

20

30

40

50

60

70

Assets2002

Regularassetgrowth

Inflowworkers

Outflowretired

Growthdue toextra

funding

Assets2015

Source: BCG Research & ING

Global life and pension assets growth 2002-2015

USD trillion

Romania

Customer Trends for 2008

Increase education and awareness

Change of mentality as result of increasing level of debt amounts

Exodus of the workforce to put pressure on the social system and determine people to become more responsible for financial planning

People will learn not to rely anymore on the moral and financial support of their families

Parents more open-minded and willing to invest in the future of their children

Thank you!