The new private company could start selling RCA insurance in the second half of this year, currently in the second stage of the authorization process, Valentin Ionescu, director general of insurance at ASF, announced to the government on Wednesday.

Romanians are increasingly concerned about the price they will pay for RCA insurancePhoto: DreamsTime / Stokkete
  • “At the moment, we have another request, which is in the second stage of authorization of a private company. This company has passed the first stage of authorization under the gilt legislation, which is the notification of incorporation, and the company is now filing for the notification of activity,” Valentin Ionescu said on Wednesday.

According to him, the operating permit will be granted sometime in June-July, if all the documents are in order.

  • “This company will sell, in addition to RCA insurance, CASCO insurance, health and home insurance. So sometime in the second half of this year we will have a new company selling RCA.
  • Regarding the discussion with the CEC, I had meetings with bank representatives, I told them what documents to bring. We are at the stage when representatives of the CEC are sending documents to the authorities, we are in touch with them and we hope that as soon as possible we will also see a state company that will sell RKA.” said the general director of insurance from ASF.

Why it’s hard to hope for low prices in RCA: In Bucharest, 7 out of 100 cars get into accidents, compared to other areas where the frequency is lower

The ASF CEO also explained on Wednesday why drivers from Bucharest and other big cities have higher prices in RCA and why it is difficult to have lower prices in RCA in general.

According to him, in large cities, the burden on the tariff calculated by insurance companies is somewhat higher due to the risks and the frequency of losses, which is higher.

  • “Usually to have the most reasonable rate, you need as many companies to sell that insurance, as much spread as possible. When there are only a few companies selling RCA, it’s hard to expect a lower rate, given that Romania’s accident rate is much higher than the European average.
  • Damage is a very important element in RCA pricing. Over the past 3 years, the average amount of losses has increased from 7,000 lei to 9,500 lei.
  • In Bucharest, 7 out of 100 cars get into accidents compared to some regions of the country where the frequency is lower, somewhere around 4%. All these elements must be taken into account when calculating the price of RCA. he declared.

He also noted that there is also a structural problem: RCA is a mandatory product sold by private companies.

  • “There are some private companies that have had losses in recent years. One of the largest companies in the Uniqa market left the RCA market due to accumulated losses of hundreds of millions over the past 7-8 years. As you know, after City Insurance exited, Uniqa applied to withdraw from RCA insurance and we may also have such situations.”, Valentin Ionescu also stated.

Read more: ‘I don’t want to comment, it seems a bit biased’: ASF boss’ response when asked about honorable retirement and performance bonuses after City and Euroins bankruptcies

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