​​After significant growth, in the context of the exit from the City Insurance market, Euroins, the current RCA market leader, returned to the level of the same period of 2021 in the second quarter of this year. market share fell to 31.8% in June 2022 from 36% at the end of March this year, the Financial Supervisory Authority (ASF) said on Monday, which presented some preliminary 6-month data.

The Financial Supervisory Authority (ASF), which handled the bankruptcy of the largest insurance company City Insurance without prosecution, released on Monday some preliminary data provided by insurance companies for the first six months of 2022.

The ASF says the degree of RCA market concentration is at its lowest level in 8 years

According to data provided by the ASF, the level of market concentration, while still high, has reached its lowest level in eight years.

• “Following significant growth in the context of the exit of City Insurance, Euroins, the current RCA market leader, returned to the same period of 2021 in market share in the second quarter of this year, falling to 31.8% in June 2022 from 36% at the end of this March year
• In connection with the development of other companies authorized to sell RCA, the dynamics of the market share of the largest player indicate that the insurance deficit created by the exit of City Insurance was covered in a balanced way by the entire market, without the appearance of distortions that would raise alarming rates for one player. In fact, this is also evident from the situation with the payouts made by the eight active players in the first half of 2022. Euroins has a share of more than 50% of gross compensations.
• Euroins’ conduct is also a result of the actions of the Financial Supervisory Authority (ASF), which has been active in ongoing supervision and control, some of which have led to sanctions.
• The ranking of the first three players by total subscription volume (PBS) is completed by Groupama with a market share of almost 21% and Allianz Țiriac with almost 19%, two companies showing almost constant results in the second quarter of 2018. this year. With the exception of Generali, all other companies have shares between 6% and 8%, noteworthy is the positioning of Axeria Yard, a French company that in June approached 6% of the market, although it did not enter Romania until December 2021. “, This is stated in the ASF press release.

ASF: RCA prices have stabilized and are actually falling. The total rate also decreases

In addition, the ASF also claims that retail RCA prices have started to fall.

• “Regarding prices, you can also observe a pleasant evolution. According to ASF’s centralized data, average premiums have stabilized and even started to decline starting in the second quarter of this year. The average premium for individuals was 904 lei at the end of June compared to 913 lei at the end of June. March For legal entities, the average premium remained approximately at the same level and amounted to 1,984 lei against 1,943 lei in March.
• Compared to the first half of 2021, the growth is still significant, but the stabilization and even a small decrease at the individual level are positive signs that show that the diversification of the market is having tangible results.”, This is also stated in the ASF press release.

Last but not least, the ASF notes that indicators of harmfulness have also improved.

• “At the market level, the aggregate reached 107%, compared to more than 112% at the end of the first quarter of this year, more than 142% in the second quarter of 2021 and more than 161% at the end of 2021.
• The level of premium commissions paid by insurers for RCA distribution fell to 10.72% in the first half of 2022 compared to 14.40% in the first half of 2021. At the same time, the level of losses significantly decreased in the second quarter of 2022. this year – 74.85%, compared to 109.15% in the second quarter of 2021. This dynamic shows that insurers have significantly reduced their losses.” says ASF.

The authorized body notes that the aggregate level of losses is calculated as the ratio of the amount of paid claims and distribution and administrative expenses to the gross earned premiums, respectively.

Accelerated market share growth due to aggressive sales, payment of high commissions to brokers, transfer of 80% – 99.5% of collected premiums to reinsurance and failure to return these amounts are among the reasons that led to the bankruptcy of City Insurance, according to the analysis of the judicial liquidator CITR. More than 1,600 creditors are currently demanding payment of debts amounting to more than 8.4 billion lei from City, which is involved in more than 14,000 disputes in national and international courts.