The Demand for Reinsurance in the Romanian Insurance Market

Abstract:

An appropriate level of reinsurance is one of the premises of the existence and functioning of a stable insurance market. In the Romanian insurance market, currently, reinsurance represents the most appropriate solution for insurance companies, as it helps to dispersion of risks, achievement of solvency requirements, levelling of risk profile and growth of underwriting capacity. This study attempts to analyze the determinants of the demand for reinsurance in the Romanian insurance market during the period 2008 – 2012. According to the final results achieved by applying specific panel data techniques, the determinants of the demand for reinsurance in the Romanian insurance market are the return on total assets ratio, company size, number of years since the company operates in the Romanian insurance market and the financial leverage in insurance.