Insurance market in Moldova remains marked by transition-related difficulties

The insurance market in Moldova is developing much slower than in other Central and Eastern European countries. Such an assertion belongs to Adrian Lupusor, the author of a study included in the fourth number of the publication “Economic Reality”, which was recently launched by the Independent Analytical Center “Expert – Grup”, Info – Prim Neo reports. The insurance market in 2007 made up 1.36% of Moldova’s GDP, while insurances density was 12.2 euros, as against 80 euros in Romania. The regulations concerning the phased rise - during five years - in the authorized capital up to at least 15 million lei contained in the new law on insurance are meant to strengthen the insurance companies, to enhance their credibility, including in front of foreign investors. The study says that the volume of subscribed insurance premiums in 2007 was by 29.4% higher than in 2006. In the first quarter of this year, the premiums rose by 35% compared with the corresponding period last year. The author says yet that the quality of this rise is open to question. ‘The insurance companies in Moldova do business mainly on the basis of Civil Liability, Casco Motor Vehicle Insurance or Green Card. Therefore, the growth of Moldova’s insurance market does not indicate a qualitative rise in the investments made in economy or the standard of living, but the influence of other factors,” Adrian Lupusor says. Among these factors, the expert mentions the compulsoriness of insurance for trips abroad after Romania joined the EU and the rise in tariffs up to the European level; last summer’s drought, which made many farmers insure their agricultural property. Respectively, the rise in insurances in agriculture was 3.5 times higher than in 2006. The sales grew only after the number of several basic products had been increased. The range of services provided by the Moldovan insurance companies is not very wide. Another shortcoming of the insurance market in Moldova is the low rate of offered damages compared with other states. In 2007, this rate was 32.5% or about twofold lower than in other European countries. The author of the study says yet that the insurance market in Moldova becomes more interesting for foreign investors. A confirmation is the coming of the Austrian company Grawe, of the Cypriot company Linekers and other enterprises to Moldova.