The transporters say prices have tripled in the past year. Private Romanian companies dominate the transportation sector, an about EUR10 billion business in 2014, as they account for 67% of it. The sector contributed EUR2.8 billion to the balance of payments last year.
Thousands of cars, trucks and other vehicles blocked Bucharest on Thursday and transporters, insurers, representatives of the Financial Supervisory Authority and the government negotiated at the government headquarters for two hours to find a solution to the problem.
After mounting tension in the banking system, where the people who are unhappy with the situation do not have the same capacity to mobilize as transporters do, the dissatisfaction in the insurance industry is challenging the authorities and the lawmakers to find solutions to a problem that is more likely a free market problem: the insurance prices.
Therefore, twenty-six years from the fall of the communist regime, Romania is becoming the stage for protests against the practices of private institutions, compared with the nineties when the government was to blame for everything.
The EUR2 billion insurance market relies on the auto liability insurance for 33% of its revenue. The year 2015 is therefore becoming the most troubled year of the insurance industry in decades, following the biggest bankruptcy of the sector, Astra, whose revenue stood at almost EUR123 million. Auto liability premiums amounted to 2.8 billion lei (EUR622 million) on the insurance market in 2014, while claims settled reached RON1.9 billion.
Transporters said after the meeting that they did not get anything concrete out of it, only promises.
“ASF told us they found problems with how auto liability insurance premiums are calculated but did not give us anything concrete or solutions. The same goes for insurers. They told us the claims rate is very high but did not come up with figures to explain how they arrived at these very high prices,” said Dumitru Badea, chairman of the Apulum Road Transport Operators Association in Alba County.
“We did not get anything concrete today, but we will go on. We are optimistic. We will continue to pressure them, especially since deputy prime minister Dincu told us that problems in Romania remain unfound unless someone pressures towards finding them.”
“The cases transporters told us about are just some examples and not all-encompassing. That we have highs and lows shows the market is competitive. We welcome the steps taken by the ASF, which includes price deregulation, which can help insurers give better discounts to good customers. Some think tanks have been put together and we are expecting any kind of constructive proposals,” said Madalin Rosu, the official in charge of auto insurance with the National Association of Insurance and Reinsurance Companies in Romania (UNSAR).
The insurers also say that the bodily injury and damages claims are impossible to predict, which is why they are another factor that drives the price of auto liability insurance up.
“It is well-known that the claims rate among transporters has surged lately, especially abroad, where the claim level is much higher and even unlimited in some countries. The talks with the transporters included steps to educate drivers about road safety. The situation in Romania is not much better, with the drivers’ conduct in traffic likely to induce substantial risks,” Madalin Rosu added.
The transporters will return for talks with the ASF officials on Tuesday, December 22, to find solutions to the problems on the auto liability insurance market.
(English version by Loredana Fratila-Cristescu)