Romania Mandatory Car Insurance Unprofitable For Insurers, Kept Only To Gain Market Share

"Insurers keep RCA services only because they want to gain market share and avoid losing clients by refusing to sell policies. Therefore, insurers see no choice but to operate on the auto insurance segment as well," Constantinescu told a news conference Tuesday.

Insurance regulator (CSA) president Angela Toncescu said damages paid by insurers increased by 30% every year, which explains why the RCA insurance becomes more and more costly.

Constantinescu said injury and moral damage claims are also increasing.

According to insurance brokers, the maximum damage claim level will reach EUR750,000 in 2010, while the injury claim level will reach EUR3.5 million.

In January, Constantinescu, who is also general manager of insurer Allianz-Tiriac Asigurari, estimated losses on the RCA segment reached EUR150 million last year. On the other hand, insurer Uniqa Asigurari representative Ileana Horvath said losses neared EUR300 million.

Both the RCA insurance and the CASCO voluntary car insurance account for over 50% of the general insurance segment.

The National Union of Romanian Insurers was founded in 1994. It has 26 members that own 95% of the local insurance market, according to their own data.

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