Most Romanian Insurers Unable To Cope Financially With Strong Earthquake

Most insurers on the Romanian market are not prepared financially for a new earthquake like the one in Bucharest in 1977, mainly because of the lack of reinsurance, said Cristian Constantinescu, president of the National Union of Romanian Insurance and Reinsurance Companies (UNSAR).

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The share of reinsurance on the Romanian property insurance segment is very low and few insurers have invested in an IT system to allow them to carry on in case of an earthquake or other catastrophic event, said Constantinescu in a seminar hosted by UNSAR.

"Many companies do not cede more than 5% of their property product range to reinsurance," he said.

According to the data of insurance regulator CSA, in 2009, the total value of premiums ceded to reinsurance, on the general insurance and life insurance segments, was 1.66 billion lei (EUR1=RON4.2632), 18.68% of the value of underwritten premiums.

Compared to 2008, the value of premiums ceded to reinsurance has gone down in real terms by 14.03%, over high reinsurance costs and the stricter requirements set by international reinsurers, said CSA.

UNSAR is an association of insurance companies, set up in 1994 to stimulate development, expansion, collaboration and cooperation in the field of insurance and reinsurance on the domestic and international markets.

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