Moldova: The market remained in the black in Q1/2011

7 July 2011 — Vlad BOLDIJAR
Moldova: The market remained in the black in Q1/2011
chisinau4In the first three months of 2011 one citizen of the Republic of Moldova spent EUR 3.6 for insurance products, EUR 0.5 more than the insurance density calculated for Q1/2010. On insurance classes in the Republic of Moldova during January - March 2011, about 30 eurocents have been spent on life insurance and EUR 3.3 for household insurance per citizen.

The gross profit for Q1/2011 managed by the players in the insurance market was EUR 1.6 million, which when reported to Q1/2010, represents a negative evolution of about EUR 1.2 million (in Q1/2010 the gross profit was EUR 2.9 million). Also, the losses counted by the insurers were EUR 0.4 million.

Thus the approved result for "loss and profit account" for the insurance market was EUR 1.3 million. In Q1/2010, the same indicator was at the value of EUR 2.7 million.

During January - March of 2010, a number of 16 companies recorded profit, the one with most profit being MOLDASIG, the leader of the insurance market in the Republic of Moldova, with EUR 0.9 million.

At the same time 5 insurers recorded losses most remarkable being DONARIS GROUP and AFES - MOLDOVA (EUR 0.10 million each).

Last but not least to be memorized is the performance managed by MOLDOVA - ASTROVAZ who in Q1/2011 made a profit of EUR 0.2 million, after have significant losses in the previous year.

Market capitalization made its first two "victims"

The social underwritten capital by the 24 companies authorized in the Republic of Moldova reached by the end of March 2011 the figure of MDL 422.6 million (about EUR 25.6 million), according to the data published by the supervisory committee. Referring to January - March 2011 in the absolute value, the share capital of the industry exceeded MDL 33.3 million.

The market capitalization was supported by the increases made by the shareholders of the 10 insurance companies. Also MOLDCARGO is the profile society that realized the most consistent capital infusion: MDL 9.1 million.

At the same time MOLDASIG (MDL 60 million), ASITO (MDL 46.5 million) and GRAWE CARAT (MDL 42.3 million) are the most capitalized insurance societies that also own 35.2% of the total value.

Moreover this capitalization continuing the market comes as following to the new bounds started in the insurance industry in 2007, by publishing in the Official Monitor, on April the 6th, of the Law no. 407, stating among other modifications the demands referring to the minimum social capital of insurers, that much reach step by step MDL 15 million until 2012. According to the new bounds, it must be annually increased as the following:
  • MDL 4 million until April 2008
  • MDL 6 million until April 2009 
  • MDL 9 million until April 2010
  • MDL 12 million until April 2011
  • MDL 15 million until April 2012
Until March 31st 2011, 12 insurers were meeting the minimum criteria. Insurance society wise, May 2011 brought a reduction of the number of companies from 24 to 22, due to the fact that they were not meeting the required criteria, ARTAS and EDICT being the two companies that stopped their activity.

"Going to the fourth stage of capitalization, the insurance market has been cut down by 2 players. The fifth and most important stage is approaching. Also, a great exercise is in the application of the new rules and demands regarding the forming of new technical insurance and solvability stocks by the end of September 2011", stated Aurica DOINA, Vice President, CNPF, within FIAR 2011.

21.2% of the premiums were ceded to reinsurers

The total value of premiums ceded in reinsurance by the Moldavian insurers in the analyzed period of time was EUR 2.7 million, increasing in absolute value by EUR 0.5 million in comparison with Q1/2010.

Thus considering the higher level of ceded premiums reported to the level of gross underwritten premiums, the coverage degree increased to 21.2% when last year it was ranked 20.1%.

On insurance companies, ACORD - GRUP is the society that ceded the most to reinsurance, the report of premiums given to reinsurance and underwritten premiums getting close to 90%, due to the weight of about 89% of aviation insurance portfolio (voluntary and mandatory, added). The next two positions are occupied by GARANT and IDEEA Asigurari, the indicators for the two being 80% and 52.4%. Altogether until March 31st of 2011, a number of eight insurers did not assign premiums to reinsurance.

The insurance market in the Republic of Moldova registered, after the first three months of the current year, a volume of gross underwritten premiums of MDL 212.1 million the equivalent of EUR 12.9 million. The figure represents, if reported to Q1/2010, according to the data published by the supervisory authority, a nominal evolution in the national currency of 10.34%.

During January - March 2011, the Moldavian insurers have issued claims worth MDL 89.7 million (EUR 5.4 million), 16.6% more than Q1/2010. Also, the premiums assigned to reinsurance totaled MDL 45 million (EUR 2.7 million), and the gross financial result of the market was MDL 20.9 million (EUR 1.3 million).

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