Bucharest, 5 May 2022 - RCA (MTPL) market continues the consolidation that began in the latter part of last year. February 2022 marked the continuation of the diversification process, an essential element in increasing competition and ultimately market stability. Data reported by insurance companies and aggregated by the Financial Supervisory Authority (A.S.F.) show that in the first three months of 2022 gross written premiums (GWP) reached RON 2.47 billion.
The majority of insurance companies, authorised to sell RCA policies, remain interested in the market, with concentration in the area of the largest player declining in February. Euroins' market share was below 35% in February, down from almost 38% in January, while the next largest players increased their shares. Allianz Țiriac was over 20.3% in February, up from 18.7% in January, and Groupama was over 19.3% in February, up from under 14.5% in January. Asirom VIG, Grawe and Omniasig VIG also remain with considerable shares, at around 8% in February.
For the whole period 1 January - 28 February 2022, Euroins' market share was around 36%, followed by Allianz Țiriac with 19.49%, Groupama with 16.84%, Grawe with 9.32%, Asirom VIG with 9.05%, Omniasig with 7.71% and Generali with 1.3%. After the first three months of the year, Euroins' share had already fallen below 35%.
Also worth noting is the maturity structure of RCA policies. More than 83% of them were taken out for the maximum period, 12 months, while only 5.75% were taken out for 6 months (the period most used so far). About 10% of policies have a maturity of one month.
High risks managed by BAAR will be shared equally between insurers
In support of the same process of diversification, which is essential for a sound market able to meet its payment obligations, the Financial Supervisory Authority has come up with a measure designed to eliminate concentration risk in the area of high-risk customers as well. More specifically, the Financial Supervisory Authority Board has decided to approve the request of BAAR member insurance companies to allocate high-risk customers equally to insurers authorised to sell RCA policies, rather than proportionally according to market share as before. The application of the new algorithm for allocating high-risk policyholders will have an impact on reducing the concentration of these risks in a particular insurance company and their dispersion, through equal take-up by all insurers.
Attached you can see the text of the new regulation: "The allocation of high-risk policyholders will be made equally to all RCA insurers who are entitled to practice this form of insurance in Romania and who have issued RCA policies in the current year, regardless of their market share. The allocation will be made according to the following algorithm: one high-risk policyholder to each RCA insurer until they are exhausted, after which the procedure will start again.”
We remind you that, according to the legislation in force, customers who receive at least three offers that exceed by 36% the reference rate for the category they belong to, are classified as high risk customers and may request the Romanian Motor Insurers' Bureau to be assigned to an insurer at a price equal to the reference rate plus 36%. So far, BAAR has already allocated more than 35,000 high-risk customers in this way.
A new player has gained market share in the first four months
The diversification process continued after February and a new player, Axeria Iard, which entered the market under the Freedom of Establishment (FOE) scheme in December 2021, is now present with a significant share. According to sales data reported by brokers and centralized by A.S.F., the French company, present in Romania through a locally registered branch, reached a market share of over 6.5% for the whole period 17 January - 28 April 2022. During the same period, with one exception, the other insurers also showed an appetite for RCA sales. Euroins maintained the highest market share at under 35% (the same level as in February), followed by Groupama with 20.5%, Allianz Țiriac with 17% and Omniasig VIG with 9.4%. Axeria Iard, Grawe and Asirom VIG have shares between 6.5% and 7.2%, and Generali with 1.15%.
HERE you can consult the reference rates for RCA by risk category.
The evolution of the insurance market in 2021 can be followed HERE.
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