CHALLENGES FOR THE ROMANIAN PROPERTY INSURANCE MARKET Adrian MARIN President of UNSAR UNSAR A new identity IN 2017 TOTAL RECONFIGURATION paradigm change extended team proactivity ID: 1047514
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1. RECENT DEVELOPMENTS & CHALLENGES FOR THE ROMANIAN PROPERTY INSURANCE MARKETAdrian MARIN,President of UNSAR
2. UNSAR, A new identityIN 2017, TOTAL RECONFIGURATIONparadigm changeextended teamproactivityrepresentative voice for the industryOBJECTIVESStabilization and development of the insurance marketRegaining the consumer confidence.SPECIAL ACTIONSOwn programs for financial education and traffic safety2017 Strategy
3. The insurance market,2016 ChallengesSolvency II - tighter capital requirements on solvency, regulatory and quality.Astra and Carpatica Bankruptcy, two companies holding about 50% of the MTPL market and over 15% market share.Excessive reliance on auto insurance, GWP auto portfolio = 75% of General insurance and 60% of the total market (ASF data, 3Q 2016).Protests of carriersMTPL tariff capping by E.G.O.RISK OF INFRINGEMENTFOR ROMANIAUNSAR notified the EU
4. Romania, Property insurance market evolution Class VIII. Insurance against fire and other natural disasters, GWP in 2015 = 14% of total P&C, increasing by 1.18% compared to 2014.2016T3 vs 2015T3 ✱ GWP -4,2%2016 Estimation: - 5% - 0%
5. Class IX. Property damage insuranceGWP in 2015 = 2,35% of total underwritings for general insurance2016T3 vs 2015T3 ✱ includes technical insurance (engineering, crops &livestock and accidental damage), GWP -1% 2016 Estimation: Decreasing or remains constant.Romania, Property insurance market evolution
6. Facultative home insurance, negative trend in 20162016T3 vs 2015T3:Facultative policiesGWP : -7%!No of policies in force: -11%Average premium: +56% (256 Ron)Mandatory policies1.75 milNo of policies in force: +12%GWP: + 13%The volatility of legislative environment, the approach based only on constraints and decrease of distribution have negative impact of facultative home insurances.
7. In case of an earthquake of the same scale as the one in 1977, the residential damage would amount to about 6 billion EUR (AON simulation).Very low level of home insurance penetration is a real problem in Romania and have a strong negative impact in case of a catastrophic event.The importance of home insurance for the safety of citizens
8. Sustainability of the insurance system for catastrophic risks, a priority for the insurance industry and authorities Sustainability of the compulsory insurance scheme (penetration, sufficiency of the premium)The protection of the population decreases with decreasing the number of facultative home insurance policiesPreparing the insurance industry and the general public for the management of claims after a major earthquake.
9. Management of claims in case of massive disaster UNSAR sustains PAID to design an improved process to handle catastrophic Nat Cat claimsUNSAR, in working projects for home insuranceLegal amendmentsUNSAR sustains with PAID corrections for Law 260/2008 concerning mandatory home insurance (removing the restriction for facultative insurance of buildings that can not be compulsorily insured, measures to increase the coverage, distribution channels)Communication projectsUNSAR will launch its own financial education program.Financial education is essential for the insurance consumer and is one of the solutions to the home insurance market development
10. Collaboration between state - insurers - citizen, key to proper management of catastrophic riskPartnership betweenall actors of the systemCITIZENSGOVERNMENT & PARLIAMENTINSURANCE COMPANIES