May 23 (SeeNews) - Vienna Insurance Group (VIG) said on Tuesday its operations in Romania generated a pre-tax profit of 3.2 million euro ($3.57 million) in the first three months of 2017, compared to a 1.5 million euro profit in the same period last year, according to preliminary data.
This significant increase in profit was due to favourable market developments that primarily led to a significant improvement in the combined ratio, the company said in a conference call presentation of its first quarter preliminary unaudited results posted on the corporate website.
Total gross written premiums of VIG's Romanian units fell by an annual 7.5% to 131.6 million euro in January-March, due to the regulatory cap the government placed on motor third party liability premiums (MTPL), which had a negative effect on overall premium development.
Romania implemented maximum MTPL tariffs for passenger cars, buses, vans and trucks, trailers and motorcycles starting in November.
In March, VIG said it expects subdued development until May 2017 given the newly introduced maximum tariffs in Romania.
VIG's premiums from MTPL insurance in Romania dropped 45% on the year to 41.1 million euro in the first quarter, while casco premiums rose 16.5% to 28.8 million euro and other property premiums grew 4.3% to 27.5 million euro.
Premiums from regular life insurance on the Romanian market dropped 1.7% year-on-year to 10.9 million euro, while single life insurance increased four-fold to 21.4 million euro. Health insurance premiums grew to 1.8 million euro in the three months through March, from zero in the same period of last year.
The group's net combined ratio in Romania improved to 98.1% in the first quarter of 2017 from 102.8% in the year ago period.
VIG's operations in Romania turned a pre-tax profit of 3.5 million euro in 2016, compared to a 46.4 million euro loss in 2015, due to strong premium growth.
In March, the group said that it plans to expand its health insurance portfolio in Romania, Bulgaria and three other European countries.
In Romania, VIG is represented by three insurance companies - Omniasig Non-life, Asirom, and BCR Life. In August, the group agreed to acquire France-based AXA Group's life and savings insurance operations in Romania.
($=0.9267 euro)