The conditions are in place for other insurers to join the mandatory motor liability insurance market in the near future, which will help normalize the market and temper down excesses, Cornel Coca Constantinescu, vice-president of the Financial Supervisory Authority (ASF), told Agerpres in an interview.
"The mandatory motor liability insurance (RCA) market is in a process of stabilization after a period of distortions to premium rates that have affected individual clients and have also impacted the level of insurance spending, especially for those companies which use vehicle fleets for business purposes. New mechanisms had to be identified through Law No. 132/2017 on the RCA, such as the benchmark fee, the high-risk insured customer, which helped render transparent the tariff formation and balance the market. However, we must not forget that the premium rate for the RCA insurance is mainly determined in connection with the risks undertaken by the insurer, and which also arise from the behavior of the insured. For these reasons the premium rate cannot be immutable, but varies within reasonable limits, taking into account, beside other elements, the frequency and severity of damage, which ultimately implies rendering motorists responsible," said the ASF vice president.
"Statistical data for H1 2017 shows a combined claims ratio of 98.97 percent for Class A10 risk insurance - RCA, which however results in a profit margin from underwriting, given that the average RCA claim paid for personal injury has decreased by 9.13 percent compared to the same period of the previous year to 47,905 lei, while for material damage it decreased slightly by 1.99 percent to 7,208 lei," added Constantinescu.
About direct settlement, the ASF vice president said that it is intended to boost customer loyalty and provides a ranking criterion based on the quality of the services to the insured customer, but that it also leads to increased confidence and strengthens the reputation of those insurers who understand the priority of providing quality services to their own customers and also seek to render them loyal.
Finally, the bonus-malus system is a healthy and fair construction designed to penalize those policyholders with a risky behavior and complements other awareness-raising actions for preventive and responsible driving, Constantinescu said in the interview.
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