Strong Growth Potential for Value-Adding Insurance Companies
Romania’s insurance market offers significant growth potential, and France-based international insurance group Groupama is one of the market’s leading players. Francois Coste, CEO of Groupama Romania, discusses recent developments in the Romanian insurance industry.
Can you describe Romania’s current insurance market?
Francois Coste: Insurance markets are measured by dividing total insurance premiums by GDP. In France the ratio is 7%, but in Romania it is only 1.2%. In other words, insurance penetration in Romania is very low, for three main reasons: a lack of awareness of risks of not being insured, affordability, and the industry’s image has been damaged by companies which failed to pay claims. Most insurance sold in Romania today is compulsory insurance.
What about health insurance?
Francois Coste: Although Romania has national health coverage, health insurance is still very important. Workers at large companies receive insurance through their employers, but at Groupama we provide solutions not only for large companies but also for SMEs and individuals through our partner, the quality healthcare-provider Regina Maria.
What is needed for the Romanian insurance market to grow?
Francois Coste: Growth will come from optional insurance, for example protection for farmers. I believe that the Romanian insurance industry will eventually catch up with the European average, but for this to happen, insurance companies must be profitable enough to pay claims.
How did Groupama enter the Romanian market?
Francois Coste: Groupama acquired three local insurance companies seven years ago, and we have invested €750 million here. Now Groupama is the Romanian market leader in home insurance (22%) and agricultural insurance (40%), and we have a 20% share of the auto-insurance market. We insure more than 1.1 million individuals, 800,000 hectares of farms, and 67,000 companies. Thanks to our focus on putting clients first, we have received the highest customer-satisfaction rating in the Romanian insurance sector. Our claims service, “Hello Groupama”, operates 24/7 and we pay claims rapidly. Groupama Romania grew by 13% in 2015. We now want to catch up in life insurance and corporate insurance. We partner with Orange concerning security devices for homeowners and we also partner with Mercedes-Benz and Dacia.
What is your personal message about Romania’s insurance market?
Francois Coste: Follow Groupama’s example and believe in Romania! The Financial Supervisory Authority (ASF) has done a very good job in promoting EU standards, and the market is consolidating around strong players like Groupama which provide value to their customers.