Business development in Romania in 2011

Premiums written Romania

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Premium development

The difficult economic situation in Romania also has an effect on the insurance sector. Poor performance in the motor vehicle leasing market, for instance, puts pressure on premium income from the non-life sector, which is dominated by the motor vehicle classes. The 4.8% reduction in premiums to EUR 502.87 million (2010: EUR 528.05 million) needs to be viewed in this light. Net earned premiums were EUR 491.13 million in 2011.

The non-life segment generated premium income of EUR 401.90 million (2010: EUR 434.89 million), representing a total decrease of approximately 7.6%.

The Romanian Vienna Insurance Group companies increased their life insurance premium income by 8.4% to EUR 100.97 million in 2011 (2010: EUR 93.16 million). This increase was mainly driven by bank distribution.

Expenses for claims and insurance benefits

The Romanian companies had EUR 380.14 million in expenses for claims and insurance benefits (2010: 324.69 million). The 17.1% increase in expenses for claims and insurance benefits (less reinsurance) compared to the previous year reflects an unfavourable development of motor vehicle claims.

Acquisition and administrative expenses

Vienna Insurance Group had acquisition and administrative expenses of EUR 142.40 million in Romania (2010: EUR 152.20 million).

Loss of EUR 12.82 million

A loss of EUR 12.82 million was recorded in Romania due to recognition of valuation allowances for premium receivables, a decrease in the motor vehicle leasing business, and the unfavourable change in motor vehicle claims in 2011.

Combined ratio of 109.7%

The combined ratio for Romania was 109.7% in 2011 (2010: 101.1%) due to a large increase in claims in the motor vehicle business.

Vienna Insurance Group in Romania*