“We’re thoroughly reviewing the insurance market. We will certainly visit other companies as well in the coming period, and in the fourth quarter we will carry out an overall audit of assets in the industry. All the players must have a responsible behavior and the figures of some of them are not where they should be,” Negritoiu said Wednesday.
The institution has carried out a series of checkup at insurance companies and Astra, Carpatica and Euroins were the main insurers ASF targeted. Astra was placed under special administration in February, after ASF uncovered a series of liquidity and solvability problems. In the case of Carpatica, the financial turnaround procedure was launched in mid-May.
“We agreed with Astra shareholders to identify renowned strategic investors that should come up with the rest of needed capital. The shareholder wants to sell and this is the only way to bring Astra back to normality,” added Negritoiu.
Astra, controlled by businessman Dan Adamescu, needs additional capital of 490 million lei (EUR110 million), according to special administrator KMPG Advisory.
ASF head said he did not take into account Astra bankruptcy for the time being, but specified the institution he runs also readied a damage scenario should the insurer not regain health.
As regards Carpatica Asig, Negritoiu stated ASF is still in talks with the company’s shareholders on the turnaround plan.
Bulgarian-held Euroins was also targeted by ASF checkups on the high number of complaints about delays in claim settling. “Euroins made a series of important decisions, operated a RON50 million capital inflow and boosted claim technical reserves by another RON50 million, but this is not enough. We want Euroins to settle the way it calculates technical reserves and the deadline is this September,” stated Negritoiu.
In his opinion, the biggest problem of the insurance market is related to the very high distribution and sale costs, amounting to 40%, way above the European average of 15%. The total costs of the domestic insurance industry stand at over 100% of gross underwritten premiums.
Domestic insurers sold policies worth RON2 billion (EUR454 million) in the first three months of this year, down 3.4% from the same period of last month amid weak sales of life insurance.
While insurers’ receipts slid, the volume of settled claims remained flat from the same period of last year, at RON1.3 billion (EUR295 million).
(English version by Catalina Apostoiu)