The move was triggered by losses generated by the RCA segment and by the fact that mother companies were no longer willing to provide capital to cover their local subsidiaries’ losses.
Insurers Omniasig, Allianz-Tiriac, Groupama, Asirom, Generali and Uniqa Asigurari underwrote total premiums of 583 million lei (EUR133 million) between January and June, which translates into a cumulated market share of about 50%. At the end of 2008, their cumulated market share stood at 80%.
The RCA segment is one of the major loss-making segments on the local general insurance market, considering that RCA premiums have dropped over the past few years, while the average paid damages increased constantly.
The average premium for an RCA policy fell 25% to RON444 at the end of June 2012, while average paid damages reached RON5,640 in the first half of the year, from about RON3,000 in 2008.
Fierce competition on the RCA segment made insurers reduce premiums significantly and create a portfolio of clients to whom they could also sell other profitable insurance products.
Generali’s market share in Romania fell by two thirds over the past four years to 11% at the end of June. Omniasig registered an RCA market share of 11%, down from 22% in 2008.
Insurers registered a combined ratio of 140% on the RCA segment in the first half of the year.
While most insurers try to keep in their portfolios only low-risk products, some companies, such as Euroins and Carpatica, increased their exposure to the RCA segment by offering low premiums. For instance, car owners may buy RCA insurance issued by Carpatica for RON512, while premiums at Allianz-Tiriac or Generali are five times higher.
Carpatica registered a market share of 7% on the mandatory car insurance segment at the end of June.
Over 80% of total damages paid by Romanian insurers represent RCA compensation.
(English version by Ioana Tudor)