The fate of Romania's insurance industry largely depends on education, therefore a huge effort is required to educate the citizens, because the Romanians are not used to thinking in the long term, Secretary of State with the Ministry of Public Finance Mihai Mandres told the conference dubbed "Quo Vadis Insurance Market in 2019".
The official insisted that the most important effort to increase the domestic insurance consumption is to educate the population, and compared the situation of the insurance industry in Romania and in the European Union, stating that the former "is far from bright".
"The truth is that the state of the Romanian insurance market is far from bright, as Romania is trailing in the EU in terms of penetration or density, far away from the European average. Here are some of the reasons for this state of play: poverty, in the first place, given that many of our fellow nationals live from hand to mouth and putting their money into insurance is out of question. It is understandable and absolutely natural," admitted Mandres.
"Another major issue is the lack of economic education, because we realize that even those who can afford paying insurance don't do it. The optional insurance coverage is the great pain in Romania, but the compulsory insurance industry is in a pretty bad state too, because as far as I know, the coverage of compulsory home insurance is at roughly 20 percent. Thirdly, and it's important to note this aspect, it's the Romania-specific reality, as Romanians do not invest in insurance. The Romanian does not think in the long term and this is visible in all activity areas. One can say that the situation of the Romanian insurance industry is a cultural issue, and culture does not change from one day to the other, it takes a lot of persuasion work, as they used to say," added Mandres.
The Finance Ministry's official believes that another issue is the insurers' negative image in the eyes of the Romanians, and argued that besides educating the population, the insurance companies should sort out things in their own backyard, and the first aspect that needs to be considered is the proper supervision of insurance companies.
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