Business development in Romania in 2013

Premium development

Premiums written declined by 11.5% in Romania to EUR 361.80 million in 2013 (2012: EUR 408.61 million). Net earned premiums were EUR 170.98 million in 2013.

In the non-life line of business, premium income was EUR 299.95 million (2012: EUR 334.05 million), a decrease of 10.2%. The Romanian insurance market continued to experience intensive price competition in the motor vehicle line of business in 2013. It was the intentional restructuring of the portfolio that led to this decrease in premium income.

In the life insurance segment, the Romanian Vienna Insurance Group companies earned premium income of EUR 61.84 million in 2013 (2012: EUR 74.56 million). The 17.1% decline in premiums was due to the elimination of a group insurance product during the realignment of BCR Life.

Expenses for claims and insurance benefits

The Romanian companies had EUR 175.44 million in expenses for claims and insurance benefits (2012: EUR 308.92 million). This was a reduction of 43.2% compared to the previous year, due both to the sharp reduction in the motor vehicle portfolio and the restructuring in the life insurance segment.

Acquisition and administrative expenses

Vienna Insurance Group had acquisition and administrative expenses of EUR 87.41 million in Romania in 2013 (2012: EUR 111.95 million). This is 21.9% less than the previous year. This change was due both to the decrease in premiums, and the resulting decrease in acquisition costs, as well as the effects of cost optimisation measures.

Result

Additional valuation allowances for premium receivables and recourse claims and further increases in reserves contributed to a loss of EUR 98.70 million.

Combined ratio

Due to the effects mentioned above, the combined ratio was 179.4% in Romania in 2013 (2012: 119.2%).

Vienna Insurance Group in Romania