“The insurance market will go through a painful time; it is an irony because we have already gone through ten years of financial losses,” Franz Weiler, the 57-year old Austrian executive who has been running Uniqa for almost one year, said.
It was obvious that someday, sooner or later, the model used especially on the auto liability insurance (RCA) market will crash. The exit of some insurers from the market will lead to higher contributions to the Guarantee Fund and implicitly tariffs.
The ailing insurers underestimated their reserves and never took into account that claims would catch up. The market has clearly reached its limit, Weiler said, adding that realistically speaking he did not see ailing companies having much of a chance of being saved by new investors.
The Uniqa group will end the year with 380 million lei (EUR85 million) revenue and expects to return to profit in 2017. It entered Romania in 2008 when it took over Unita from Vienna Insurance Group.
Uniqa Asigurari, a top ten insurer in Romania, will no longer be willing to take a loss on the sale of auto liability policies (RCA), which is why it will make such insurance more expensive. It also plans to reduce exposure to auto insurance products and focus instead on property, health and life insurance, Franz Weiler said. (EUR1=RON4.4580)
(English version by Loredana Fratila-Cristescu)