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Following the bankruptcy of City Insurance, Unique Asigurari received ASF’s approval to exit the RCA market. The number of RCA players was reduced to seven. The 7 companies that will remain in the RCA area are Euro-ins,
Author: Mircea Nica
Uniqa Asigurări, part of the Austrian Unique group, received the approval of the Financial Supervision Authority (ASF) to exit the RCA market, after City Insurance entered the path of bankruptcy, and the RCA segment entered a turbulent period, with increases in tariffs.
ASF transmitted that it approved “the withdrawal, upon request, of the authorization for the practice of compulsory motor civil liability insurance for the damage caused to third parties through vehicle and tram accidents (RCA) granted to the company Uniqa Asigurări.”
The companies remaining in the RCA area are Euroins, Allianz-Ţiriac, Omniasig, Asirom, Grawe, Groupama, and Generali. The seven players ended S1/2021 with a cumulative volume of subscriptions of 1.19 billion lei, representing 53% of the total subscriptions on the RCA market of 2.25 billion lei.
In S1/2021, according to the report drawn up by ASF, City Insurance was still in the ranking of players in the RCA area, with subscriptions of 1.04 billion lei, and Unique was still present on the RCA market, with subscriptions of 17 million lei.
Unique Ashgari announced towards the end of September its intention to exit the RCA segment, citing that it has a market share of only 0.5%, and due to the fact that this area has always brought losses, the company’s management decided to submit a request for withdrawal of RCA license to ASF.
Analysis
Analyzing the events of the last months in the RCA insurance area, it can be seen how the collapse of City Insurance, the largest insurer in Romania both at the level of the entire market and in the RCA area, caused a wave of adverse effects.
Among these effects, we can see how RCA policy prices have doubled or even tripled in some cases, both due to the market’s need to compensate for the lack of a big player, but also to be able to cope with a possible wave of high-risk drivers who could storm the insurers remaining in the RCA area. Although, legally, there are solutions that can prevent the exaggerated pricing of a high-risk driver, by contacting the Bureau of Motor Vehicle Insurers in Romania (BAAR) from where it would be assigned to an insurer, where the reference rate of the ASF is taken into account plus an N factor, this wave of price increases has caused significant reactions.
In addition to the high prices at RCA, most of the services have taken measures since the possible bankruptcy of the big player in the RCA market was circulated. Refusal of repairs based on City Insurance policies still remained at some services, for fear of not receiving their money.
Moreover, the pressure created by this hole left behind by City Insurance of 500 million euros, but also by a number of more than 3 million drivers, created an even greater reason for RCA insurers to remain in the market to protect themselves much more.
Unique Asigurari exit from the RCA area could be just the beginning, considering the recent draft law that would cap the prices of RCA policies at the level of ASF’s reference rates. Although at ZF’s request, ASF did not comment on the parliamentary legislative initiatives, Mădălin Rosu, the president of BAAR, said last week for ZF that this initiative could force some companies to go bankrupt or exit the market.
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