Policy sales, on the other hand, were flat to about RON4.5 billion after the first nine months. Experts say such differences are normal and are no reason for concern.
“Such fluctuations may occur at times, they are normal and insurers should not be worried,” believes Valentin Tuca, chief executive officer of risk management provider and insurance broker AON for Central and South-Eastern Europe. “As for auto liability claims, I’ve noticed that there are more and more cases of bodily and emotional injury claims settled in court. This shows the local market is catching up with the West in this respect.”
Insurers settled a total of RON3.8 billion claims in January-September, which means an almost 4% increase compared with the same time last year. Gross written premiums increased at less than half the rate, 1.4% to RON4.9 billion.
Most claims were paid for auto liability and comprehensive auto insurance and accounted for over 86% of the total in the first nine months.
Auto insurance policies usually generate the heaviest losses for insurance companies, as claims settled are higher than premiums collected. However, the highest increase in claim settlement expenses came from property insurance, up 50% to RON49 million.
On the other hand, Omniasig of all insurers used the highest portion of premiums, 99% to settle claims, paying RON788 million to its clients. The high claim rate of Omniasig is no surprise, because the largest local insurer posted more than RON160 million loss last year.
Asirom, owned by Austria’s Vienna Insurance Group like Omniasig, used 71% of its premiums to settle claims paying RON276 million to customers in the first nine months, an increase of 38%.
Carpatica Asig and Euroins saw claims go up by 56% and 49% compared with the year-ago period.
Generali and Platinum, however, announced 33% and 21% lower claims at the end of September 2012.
“The companies that recorded claim settlement expense decline are not cheap insurers, as the policy rates offset and lead to a low claim level,” Tuca explains.
Companies cut claim settlement spending by reducing exposure to auto insurance. In Platinum and Generali’s case, auto liability insurance accounts for 0.3% and 21%, which comprehensive insurance accounts for 12% and 33%. (EUR1=RON4.5089)