According to the latest ASF data, RCA prices increased in the first nine months of last year, the first annual average value was 1,209 lei, which is 5% more than in the same period of 2022. In the same period, the average loss increased by 12% to 10,750 lei. With RCA’s revenues more than double the claims paid out, the insurers break even. The reason is the technical reserves, as well as the costs and contributions they have to pay.

RCA’s revenues increased by 10% to 6.3 billion lei. Groupama and Allianz-Țiriac have almost 50% of the RCA market

On September 30, 2023, seven insurers received permission from ASF to carry out RCA insurance activities: Allianz-Ţiriac Asigurări, Asigurarea Românească – Asirom Vienna Insurance Group, Eazy Asigurări, Generali Romania Asigurare Reasigurare, Grawe Romania Asigurare, Groupama Asigurări and Omniasig Vienna Insurance Group.

On the RCA market in Romania, there are two branches operating by right of foundation: Axeria IARD and Hellas Direct.

The level of concentration of the first leading insurers remained high in the first nine months of 2023, with Groupama and Allianz-Țiriac together having a market share of almost 50%.

However, ASF says that there is a decrease in the degree of concentration compared to previous periods, taking into account the dynamics of subscriptions of branches present in the local market, whose combined share in the mentioned period was 13.6%.

The average RCA premium increased to 1,209 lei

In the entire market as a whole, on September 30, 2023, the first annual average value of RCA was about 1,209 lei, which is 5% more compared to the same period in 2022, and 79% compared to 2021, respectively.

Compensations were paid – more than 2.3 billion lei. RCA’s average loss is 10,750 lei

The amount of gross compensation paid by insurers was 2.3 billion lei for the first nine months of 2023 for paid claims in the RCA segment.

The Insurers’ Guarantee Fund has approved an amount of approximately 530 million lei to pay RCA claims in the period January-September 2023, of which 424 million lei represent payments made to the RCA segment as a result of the bankruptcy of City Insurance. .

In the period from January to September 2023, insurers paid out about 2.3 billion lei for about 217,000 claims, resulting in an average claim amount of about 10,750 lei, which is 12% more than in the same period of the previous year.

Of the total amount of gross compensations paid, the largest amount was paid for material damages (1.9 billion lei), the rest (477 million lei) represents the amount of damages paid for bodily injuries.

Damages paid to individuals were higher than those paid to legal entities, both for bodily injury and property damage in all periods analyzed.

As for the average damages paid by RCA, calculated as the ratio between the compensations paid and the number of damage files paid, the average damages paid for bodily injuries were about 75,870 lei and for material damages 8,813 lei.

Indicator that shows that insurers are in the red: the cumulative loss is 94%

Despite significantly higher revenues than insurance payouts to policyholders, insurers lose money from RCA.

“The cumulative loss ratio, calculated on the basis of aggregated data for all general insurance classes, was approximately 94% at the end of the third quarter of 2023, down from 101% in the same period of the previous year,” ASF said.

The total claims rate includes, in addition to the compensation paid, the contributions paid to the Policyholder Guarantee Fund (FGA), the National Defense Fund (BAAR), and distribution and administration costs.

In addition, in the process of calculating the level of losses, already settled or partially paid losses, as well as created reserves for losses, are taken into account.

The value of technical provisions created by companies for approved and not yet paid claims (RBNS) was 2.7 billion lei at the end of September 2023.

As for technical provisions for incurred but not yet confirmed and unpaid losses (IBNR), they recorded a value of around 3.25 billion lei.