​The imbalance between demand and supply in the RCA market will continue into 2024, which could lead to either an increase in applicable RCA tariffs or a decrease in demand, according to the Competition Council’s analysis.

The imbalance between supply and demand in the RCA market will continue into 2024, which could lead to either higher applicable RCA tariffs or lower demand, according to the Competition Council’s analysis.

• “Given that the extension of the Euroins RCA contracts coincides with the end of the cap on RCA premium rates, by the end of 2023 an unusually large number of RCA policyholders will require new contracts, which should be accepted by active insurers remaining in the market RCA”
• Thus, in 2024, the situation of imbalance between demand and supply at the market level will remain, which may lead to either an increase in the applicable RCA tariffs, or a decrease in demand in the current economic and geopolitical context, which may cause material difficulties for the population.” according to a report published on Monday by the Competition Council.

The Authority recalls that the insurance industry, particularly of the RCA type, has undergone major transformations over the past three years as a result of the exit of three insurers, two of which had the largest RCA market shares. .

Thus, in September 2021, the Financial Supervision Authority (ASF) revoked the authorization of City Insurance, and in November of the same year approved the revocation, upon request, of the authorization of Uniqa Asigurări.

How RCA and the Euroins policy extended the price limit

The year 2023 started with a new shock in these markets, when the ASF revoked the operating license of the market leader RCA – Euroins Romania.

In March 2023, when the authorization was withdrawn, Euroins held 27% of the RCA market.

Beginning September 9, 2023, RCA’s policies with Euroins would expire automatically, as a result of the expiration of the 90-day period from the opening of the company’s bankruptcy proceedings in court (June 9, 2023).

However, the deadline was extended by three months – until December 8, 2023.

At the beginning of April 2023, to prevent the negative effect of a sharp increase in premium rates, similar to that caused by the bankruptcy of City Insurance in the last quarter of 2021, RCA rates were capped for six months, at the level of the insurer’s practice on February 28, 2023.

The Government has recently extended for 3 months (until the end of December 2023) the cap on maximum RCA premium rates practiced by insurers, a cap which would have expired on 10 October 2023 in the absence of this measure.

At the time of the adoption of the regulatory act on the extension of the ceiling – October 2023, the number of compulsory RCA insurance contracts signed by Euroins that are still in force amounted to approximately 1.7 million contracts, which is approximately 17% of the entire national car fleet.

Which insurers should absorb Euroins clients

According to the latest official data, as of June 30, 2023, there were six national insurers operating in the RCA market: Allianz-Ţiriac Asigurări, Asirom Vienna Insurance Group, Generali, Grawe, Groupama and Omniasig Vienna Insurance Group.

In addition to these companies, two branches of foreign insurers Axeria Iard and Hellas Direct, based on freedom of establishment (FOE), and Bulgarian insurer DallBogg, based on freedom of provision of services (FOS), operated in Romania.

On September 19, 2023, the company Eazy Asigurări was registered, which also has the right to deal with RCA insurance.

In the first six months of 2023, Axeria Iard recorded gross premiums for RCA of approximately 339 million lei, which represents 7.3% of the total gross premiums for this segment, while Hellas Direct accumulated gross premiums of over 267 million lei in the same period (5.8% of the RCA market).

The concentration level of the RCA market remained high in the first half of 2023 as well, when three players (Euroins, Groupama, Allianz Țiriac) accumulated approximately 60% of the market.

The CASCO market is controlled by three insurers: Omniasig, Groupama and Allianz-Țiriac

According to the agency, the level of concentration in the CASCO optional auto insurance market also remains high.

With demand growing by 18% in the first half of 2023 compared to the first half of 2022 and maintaining the number of competitors at the level of the previous year, the degree of concentration also remains high in the voluntary insurance market (CASCO).

In the CASCO segment, the top three companies at the end of June 2023 had a market share of about 75%49 in terms of gross written premiums.

According to ASF data, Omniasig, Groupama and Allianz-Țiriac controlled 75% of the industry’s revenues, which rose to 1.6 billion lei in the first half of this year.