“Dumping is no longer a solution for promoting insurance companies, not even on the car insurance segment,” Constantinescu said at a conference organized by Ziarul Financiar.
According to CSA data, the Romanian car insurance market contribute about 50% of overall premiums underwritten locally, which rose 5.8% last year to 8.27 billion lei (EUR1.87 billion).
Underwritten premiums on the car insurance segment amounted to RON4.1 billion, with RON2.13 billion generated by mandatory car insurance policies (RCA).
Bogdan Andriescu, head of the national association of insurance brokers UNSICAR, said the local insurance market is dependent on car insurance contracts, which became more obvious after the onset of the financial crisis.
“Crowned king of the market share increase, this segment eventually proved to be a vulnerable dictator. Voluntary car insurance CASCO and RCA contributed over 76% of the general insurance premiums underwritten in 2008 and some 61% of the overall underwritten premiums. In 2012, the car insurance segment accounted for 61.5% of the general insurance segment and for 50% of the overall insurance market,” Andriescu added.
Fewer car insurance contracts meant fewer requests for damages, but not necessarily lower, he highlighted, adding that the increase in damages paid by insurers should have been offset by an increase in RCA policy prices.
“In 2012, the combined ratio exceeded 124% on the RCA segment and reached 127% on the CASCO segment, from about 83% and 88%, respectively,” Andriescu said.
The losses registered by insurers were covered by shareholders through capital injections which amounted to about RON800 million in 2012 alone. (EUR1=RON4.4099)