Why RCA truck prices are so high: what carriers are advertising, what internal ASF data shows and what solutions are on the negotiating table

“When I registered my first truck in 2018, the RCA price was around 4,500 lei, and today I pay 13,500 lei for the same truck, even though I had no incidents and was in the B5 class,” he declares. for HotNews.ro, Alex Pertya, one of the transporters who came to the protest in the capital. An internal ASF analysis by HotNews.ro shows why the RCA is costing the trucks so much and what solutions can be discussed next week to end the protests.

Transporters protestPhoto: Inquam Photos / Octav Ganea

LIVE Third day of protests by transporters and farmers blocked by filters at the entrances to the Capital. Protesters with large cars regrouped in Afumak / The delegation of demonstrators was received by the government – VIDEO

The transporters, who have been protesting for a third day by blocking traffic at the entrances to the capital, charge that they can no longer bear the high price of the RCA, which has been increasing year on year, in some cases even though they have not caused any damage.

“For trucks over 16 tons, RCA insurance for 12 months costs between 18,000 and 20,000 lei for class B0 (first registration), while in Poland, for example, a similar RCA policy costs somewhere around 4,000 zlotys, which is equivalent to about 4,600 lei.
Prices in Romania are very high and are increasing every year. We hope to find a solution next week at a meeting with the ASF,” says Alex Percea, a representative of the protesting carriers.

Representatives of the office of Prime Minister Čolaku held a meeting with representatives of carriers from all regions of Romania on Thursday in the Victoria Palace, during which it was agreed that a working meeting between representatives of carriers and the Financial Supervisory Authority (ASF) to find solutions to the RCA problem.

ASF internal analysis: Claim frequency has the biggest impact on truck RCA pricing

An internal ASF analysis conducted in this context of transporters’ protests, a document contacted by HotNews.ro, shows why RCA prices are higher for trucks over 16 tons owned by legal entities compared to the rest of the market.

The frequency of requests for the period 2018-2022 in the category “trucks, >16 t, for legal entities” was 19.1%, while for the market as a whole – 5.7%. In the same period, the severity of damage to trucks over 16 tons owned by companies amounted to 15,933 lei, compared to 8,855 lei in the general market.

“The strongest influence on the final value of the RCA tariff for the category “Freight transportation, >16ť” is the frequency of losses. This factor largely explains the differences (in a negative sense) compared to premiums charged by insurers. in other European Union markets,” according to an ASF analysis consulted by HotNews.ro.

What are the RCA prices for trucks in Romania

The dynamics of RCA premiums for the same category “vehicles carrying goods >=16 tons, legal entities” shows that last year the average RCA premium for category B0 for 12 months ranged between a minimum of 9,135 lei (in July) and a maximum of 10,209 lei (in May).

On the other hand, RCA’s basic fare ranged from 8,240 to 8,794 lei.

“Therefore, both the first average and the base tariff were relatively stable in the second half of 2023 (the value of the base tariff published in December 2023 is 8,609 lei), and this situation will also be maintained during the first quarter. 2014,” says the internal analysis of the ASF.

Over 50% of RCA’s truck policies are classified as high risk insurance. The maximum bonus is 12,000 lei

However, ASF data shows there are problems with many carriers turning to the high risk underwriting procedure administered by the Bureau of Motor Insurers (BAAR) to get lower car insurance rates.

The High Risk Policyholder Procedure is the only legal means available to policyholders to obtain cheaper RCA policies.

The Bureau of Motor Insurers (BAAR) says on its website that by law policyholders who receive quotes from at least three different insurers within a 12-month period whose RCA premiums are 36% higher than the base rate associated with the risk segment they are part of, they are considered high risk policyholders.

These policyholders can apply to the Bureau of Motor Insurers (BAAR), which selects an insurer to sell them a policy at a price within legal limits.
The problem is that people do not know that they are considered high risk insured and do not know how to calculate their own risk premium, and brokers are not interested in helping them.

An internal ASF analysis conducted by HotNews.ro shows that this mechanism is mainly used by insured persons in the category “Freight transport, >16 t”.

“More than 50% of insurance policies concluded in recent months by policyholders in the category “Freight transportation, >16t” were assigned to the category of high-risk policyholders.
The final premium in the case of high-risk insured persons who applied to BAAR does not exceed 12,000 lei.
The rates charged by insurers for the “Truck, >16 t” category range relatively widely (from single to double) for the same policyholder, which is affected by: the safety reserves applied (which reflect the level of volatility of claims to which segment the policyholder belongs ); margins of commercial negotiations; distribution costs; the bonus-malus system due to its main effect (at a high premium, applying a percentage increase in the premium leads to an even greater value in absolute terms).
Paradoxically, but undesirably, due to the high-risk policyholder management mechanism, the base rate became the basis for the formation of the final RCA premium for policyholders of the “Truck transport, >16t” category, according to an ASF document seen by HotNews.ro.

What are the RCA prices for trucks in other countries of the region

The ASF analysis also provides some examples of RCA tariffs applied in other EU markets for the “Freight, >16 t” category:

Poland: RCA – made by autocrat: 17,600 lei; RCA – part of RCA+CASCO package: 8,800 lei
Latvia: 13,200 lei
Hungary: 11,500 lei (average value, minimum 6,000 lei and maximum 40,000 lei)
Slovakia: 11,100 lei

Over 61,000 carriers applied to BAAR last year. Most received RCA’s lower prices

HotNews.ro asked the situation of the policyholder who asked for help from the Bureau of Automobile Insurers (BAAR) last year, and the answers of the organization, whose members are all insurers selling RCA in Romania, confirm the problems of carriers with high RCA prices.

“The number of appeals in 2023 was approximately 67,000, of which 56,700 met the requirements for inclusion in the category of high-risk insured persons.
In 2023, the number of applications from individuals regarding cars amounted to about 5,000, of which about 2,700 met the requirements for inclusion in the category of high-risk insured persons.
In 2023, the number of requests from carriers (individuals and legal entities) for vehicles intended for cargo transportation (the category includes all categories under 3.5 t, from 3.5-16 t and over 16 t) in 2023 was about 61.4 thousand ., of which about 53,800 met the requirements to be classified as high-risk insured,” BAAR representatives told HotNews.ro.

According to the procedure, allocation to high-risk policyholders is made evenly across all insurers that issued RCA policies in the year in which the request is made.

BAAR representatives also reported that the allocations fell within the time limits provided by the procedure posted on the BAAR website (Article 18), accordingly, they did not exceed 20 days from the date of receipt of the request, if it was accompanied by all the documents specified in part (3) of the article 17 procedures.

What solutions is ASF considering to reduce the price of RCA for trucks

ASF’s internal analysis outlines some possible actions to reduce the RCA final level for insured persons in the “Freight, >16 t” category, namely:

Improvement of the “Bonus-Malus” system;
A similar and general interpretation of certain principles used in the calculation of RCA tariffs (mainly those relating to segmentation and commercial negotiation margins)
Monthly/quarterly payment of insurance premiums as a general practice.

Carriers want to conclude protocols with insurers from abroad

The Confederation of Transporters (COTAR) also promises to take the decision to the negotiating table.

Carriers want to sign protocols with insurers from outside the country to sell them RCA policies at the Financial Supervision Authority (ASF) base rate, Vasile Stefanescu, president of the Confederation of Operators and Authorized Carriers of Romania, said on Wednesday. (COTAR).

“Regarding the RCA policy, I have seen that there is a 3 month extension of the so-called ceiling, although it is not a ceiling. But next week we will also have discussions with the new ASF president.
Let me give you another official statement: we have found third party companies that will come in and underwrite RCA policies for us, the carriers, at an approximate rate, which is what is on the ASF website. Not like it is today. That is, at B0, a 16-ton truck pays 15,000 – 16,000 lei, and the base rate is 8,700 lei.
We will make protocols with some foreign companies that will give us an approximate rate because it is normal for a European country. We will pay at the base rate,” Vasile Stefanescu said.

ASF: RCA prices do not depend on the basic tariff, especially for insurers in other countries

According to ASF, the proposal put forward by the President of COTAR seems difficult to implement

“The reference rate is not the market price of selling RCA policies, it is only informative and reflects the development of the market in previous periods (the last 5 years).
Insurers have their own pricing policy, so the prices they set do not depend on the base rates, especially in the case of insurers operating in other markets, for policyholders of these companies,” ASF representatives told HotNews.ro.

On the other hand, the ASF foresees that if carriers find insurers to sell RCAs at such low prices, this will be possible through a “European passport”.

“Insurers operating on the basis of FOE (Freedom of Establishment) can offer services on the territory of Romania.
In the case of RCA, the European Directive on OSCPV imposes an obligation to introduce guarantee schemes in all European countries”, ASF representatives also stated.