​Competition in the motor insurance sector, particularly RCA, has intensified since the bankruptcy of City Insurance, former leader RCA’s customers have been redistributed among the remaining players in the market, but the bankruptcy has also taken a psychological toll on policyholders, according to a report published on Tuesday by the Competition Council.

“One of the main damages caused by the bankruptcy of City Insurance is psychological in nature, namely related to consolidation of the policyholder’s perception of the unacceptably low level of RCA premiumsas reality has shown.” it is stated in the report of the Competition Council.

• READ THE REPORT OF THE COMPETITION COUNCIL HERE

In other words, policyholders experienced a shock after the bankruptcy of City Insurance, as RCA prices rose significantly and there were no insurers left to sell at unacceptable prices.

The authority shows that as of the end of 2021, 7 national insurers remain in the RCA market and, in addition to these companies, in the fourth quarter of 2021, the branch of Axeria Iard started its activities in the territory of Romania, based on the freedom of establishment.

In fact, CITR, the receiver of City Insurance, revealed this summer that one of the main reasons for the bankruptcy of the largest insurance company with a market share of 43% and 1.15 million customers in the RCA sector alone in 2021 was a deficit of 1.2 billion lei in as a result of selling insurance policies at a rate lower than the rate notified by the ASF in order to increase market share.

Competition Council: In the field of natural gas, the conditions of competition have changed

Returning to the Competition Council’s report, the authority says that in 2022 it saw increased competition in the road freight industry (+1.8%) and even in the car insurance sector (+4.7% non-compulsory motor insurance, civil insurance liability car +6.6%), but also a change in the conditions of competition in the natural gas sector.

• “The natural gas and electricity industry continues to be a major topic of daily debate. The main disruptions in these two sectors are caused by external factors, such as restrictions on gas supplies to Europe from Russia, uncertainty about the war in Ukraine and the increase in the price of CO2 emission allowances.
• The impact of these factors, in terms of higher prices in both natural gas and electricity markets, was also exacerbated by reduced domestic supply: lower production of both natural gas and electricity.” this is also shown in the authority report.

The top 5 industries by the level of competitive pressure remained unchanged, with IT consulting services in first place, followed by clothing and footwear retail, pay TV channels, IT outsourcing services and architectural services.

With respect to the pay TV industry, we can observe this more and more people are subscribing to video on demand platforms “Video on Demand – VOD”a much more pronounced phenomenon in the urban environment than in the countryside.

Industry forecasts show that this type of service will also grow in the future, in parallel with the reduction of time spent in front of classic TV channels. However, the vast majority of those who subscribe to VOD do not give up their classic TV subscriptions, they just spend less time watching them.

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