Insurance companies in the Republic of Moldova accumulated in 2021 gross written premiums amounting to MDL 1,926.3 million, an increase of 32.6% compared to the previous year. The advance is genuinely the highest ever in the history of Moldova insurance market and it is much more significant because it came after a dramatic 10.6% drop in 2020 due to COVID-19 outbreak.
The evidence for 2021 show that the sector remains oriented towards non-life insurance, which has a share of 94.8%, while life insurance accounts for 5.2% of the total volume of gross written premiums. In the non-life insurance segment, the value of gross written premiums peaked to MDL 1,825.7 million, bouncing by MDL 473.8 million. At the same time, the gross written premiums related to life insurance amounted nearly MDL 100.5 million, maintaining the same level of the previous year.
Motor insurance keep holding the biggest chunk of the insurance market recording over 70% of total gross written premiums. The highest volumes of premiums came from compulsory motor third party liability insurance, amounting MDL 853.1 million (+ 33.5% compared to 2020), of which domestic MTPL – MDL 585.4 million (+26.9 %) and MTPL within “GREEN CARD” system – MDL 267.7 million (+ 50.5%), followed by CASCO insurance – MDL 417.8 million (+ 23.2%).
Insurance companies paid during 2021 insurance indemnities in the total amount of MDL 662.1 million, which is by 11.0% more than they did during the previous year.
Roughly 94.8% of the indemnities went to the non-life insurance sector (nearly MDL 628 million), and 5.2% - to the life insurance sector (MDL 34.2 million). The highest volume of indemnities was paid for the following types of insurance: compulsory domestic MTPL – nearly MDL 267.1 million (+ 37.9%), CASCO insurance – MDL 227.5 million (+25.6%), MTPL within “GREEN CARD” system – MDL 58.8 million (-21.1%), health insurance – MDL 34.7 million (+ 30.8%) and agriculture insurance – MDL 16.5 million (- 37.5%).
The data are prepared based on the information presented by 10 insurance companies, which were active as of December 31, 2021.
The National Commission for Financial Markets states that although the volume of gross written premiums increased significantly in 2021, the weight of insurance sector in GDP was 0.80%, attesting a modest increase of 0.1 pp of this indicator compared to 2020 (e.g. in the region countries the index varies between 1-1.5 percent). This fact indicates that the GDP grew faster than (re)insurance sector, because of reasons related to the economic and financial situation of the Republic of Moldova citizens, which highly focus on first need products and services.
At the same time, in the context of misinformation by the media, the supervisory authority states that over the last five years, the insurance market has shown a sustainable trend of gross written premiums growth. Likewise, there is an upward trend in insurance claims paid annually (2018 – +8%, 2019 – +20%), which maintained in 2021 (+11%), conditioned by the facilitation of use of amicable accident settlement mechanism, by the spare parts price increase and by the labour cost increase. Insurance companies reported during last three years negative results related to the operational (insurance) activity from MDL 66.1 million (2019) to MDL 25.1 million (2021). Thus, the dependence on the domestic non-life insurance market (particularly motor insurance) has led to losses for insurance companies over time (which is a similar situation to the markets in the region).
Insurance premiums subscribed in 2021 for production risks in agriculture amounted MDL 67.5 million, soaring about 4 times compared to 2020 (MDL 16.8 million). It became possible due to the Law on subsidized insurance in agriculture no. 183 of 11.09.2020 entered into force, which provides the possibility to pay insurance premiums in instalments and along with the uplift of premium subsidized by the state from 50 to 70 percent. Meanwhile MDL 16.5 million in compensations were paid, which are about 37.5% less than in 2020 (MDL 26.4 million).
According to the data reported as of 31.12.2021, the net combined operating rate for the main insurance products is as follows: for domestic MTPL - 113.82% (2020 - 106.61%) and MTPL within “GREEN CARD” system - 101, 11% (2020 - 107.26%), both surging higher compared to 2020.
Following the solvency rate reported by the insurance companies, there are figures above the normative level, which is between the range of 341.39% - 100.25% for the non-life insurance category. Among them, there is a company with the solvency rate below the normative limit along with the liquidity rate landing between the range of 51.62 - 1.15.
The insurance premiums gathered by intermediaries reached the MDL 1,088.4 million, which is nearly 56.5% of the total gross written premiums, soaring about 40% compared to the same period of 2020 (MDL 779.2 mil.). The charges calculated from the intermediation of insurance contracts reached the level of MDL 350.5 million. Insurance/reinsurance brokers accounted for 79.5% of the intermediated premiums and 44.9% of the total written premiums while insurance agents accounted for 20.5% of the intermediated premiums and 11.6% of the total written premiums.