Main statements
Part I
Alexandru CIUNCAN, President & General Director, UNSAR
- Gross written premiums in the first quarter of 2023 exceeded 4.7 billion lei, according to preliminary ASF data.
- Premiums in the property segment were up. Claims paid increased by 35%.
- The insurance industry paid claims totaling 21 million euros in 2022 on the property segment. The figure could be much higher, if the penetration of this insurance were higher.
- In Q1, the number of newly written home insurance contracts increased by 14%, and in terms of gross written premiums, the increase was 12% (compulsory and facultative insurances combined), ASF data show.
- After 12 November, we will have a new law on compulsory household insurance in Romania.
- Home insurances are on the top of the list of interest of the Romanians, according to the latest UNSAR - IRES barometer.
Interactive panel - The Future of Property Insurance in Romania
Alina BARBULESCU, Property Insurance Specialist, UNSAR
- Property insurance means more than just housing. According to UNSAR member companies, there is potential for growth on this insurance segment. At the end of 2022, 3.9 million policies were in force for class A8 alone (insurance covering fire, other natural disasters, explosion, storm). If we eliminate home policies (compulsory and optional) we are left with 450,000 contracts. This means that this also includes policies for entrepreneurs.
- According to public data at the end of 2022, there were 1.1 million limited liability companies and 8,000 joint stock companies. So we still have quite a lot of work to do to get where we want to be, but together, through sustained efforts we can reach the Romanian entrepreneur and diversify the industry portfolio
- When we look at a business, it is important not to look only at premises: there are also people working, various machines. Few think about the financial damage, it is important to look at the business as a whole and to secure it according to the specifics of the activity.
- As risks change, so does their impact. When we look at a business, it is important to see what we can come up with for entrepreneurs. Often, some of them are not aware of the long-term impact on the business - and our role is to give them all this information.
- When it comes to cyber risk insurance, the interest of Romanians is growing year on year.
-Totally, affinity insurance is also of interest, both on the retail and corporate side, where partnerships and liability development can be achieved.
Gheorghe GRAD, CEO, Renomia
- As a comparison between Romania and the Czech Republic: the Czech Republic has half the population of Romania, has 5 times the PBS of Romania and about 40% of the motor market.
- We have opportunities for the market and I believe that brokers are those professionals who represent the direct interaction with clients in the sales relationship and we should build that channel of communication whereby we can reduce that gap as much as possible.
- So much has changed since 25 years ago. Western insurance concepts and products have come to Romania and we should integrate them into the market. We are in a totally different world, it is absolutely fascinating.
- If I had an environment of entrepreneurs, because they are the most uninsured or underinsured, I would explain to them that it is the cheapest source of financing a material loss that can be covered by insurance.
- I don't know of any client who has had insurance for 10 years and has not had a single loss. Given this fact, how is it possible to be uninsured?
Marius GEORGESCU, Director of Corporate Risk Department, GENERALI
- Ever since insurance companies were founded, we have been trying to offer every customer an insurance solution.
- Our coverage is primarily linked to demand. If clients do not realize their need to be protected, we do not meet them, because they do not ask us for insurance.
- Distribution channels have diversified.
- The more the assets decrease in value, the lower the interest of the respective company in insurance. Even if insurance were affordable, it is not a priority for small or start-up companies.
- The level of protection has changed in the last 25 years: for example, today we are talking about sprinkler systems with continuous monitoring, compared to 25 years ago, when there was only one fire extinguisher. The basic needs remain the same - fire will be fire, storm will be storm - but the economic framework is changing.
Lucian MARIN, Director Non Motor Claims, GROUPAMA Asigurari
- You can see quite clearly a difference between large companies, which can afford to do a better risk assessment, and small companies. Large companies have much better, more complex insurance policies.
- Smaller companies are also the most at risk. They don't contemplate the idea that a fire could affect their business to such an extent that it would close them down.
- A lot has changed in the market over the last 25 years. Insurance conditions have become much more complex. On the claims side, all kinds of new technologies have appeared and we have to adapt. It's a changing market every day.
Angela VOICU, Corporate Underwriting Director, Commercial Property, Liability & Financial Risks, OMNIASIG VIG
- Risks in Romania are insured on policies mostly issued by Romanian insurers. Risks are underwritten in Romania, regardless of the reinsurance companies behind these companies.
- Multinational companies have an insurance culture, with more complex insurance programs, but unfortunately, what differentiates the insured portfolios in our market is the quality of risk and the inability of SMEs to invest in improving the quality of risk.
- Developing the insurance culture and helping our insureds understand the role of insurance are important steps - we need to make an effort to increase this engagement.
- Over the last 25 years, the market has developed in all respects, the corporate market benefits from the support of brokers, experience is different and the level of development is different.
- In the event of a disaster, insurers have a very important role - they can intervene and provide rapid solutions to restore damaged properties. But insurers need to have complex insurance, for example including business interruption, not just property protection.
PART II
Menekse U?AROGLU, CEO, IUC Group, Turkiye
- In Turkey, there are 73 insurance companies operating, out of which 49 are non-life.
- 12,6 billion dollar (December 2022) total premiums on the Turkish insurance market. Paid losses in 2022 reached 4.9 billion dollars, out of which 3.85 billion dollars were paid on the non-life segment.
- In 1999, two devastating earthquakes affected the Marmara region, with economic losses of over 10 billion dollars and insured losses of 800 million dollars. The insurance penetration was low. This led to the implementation of TCIP and mandatory household insurance.
- TCIP indemnifies the material damages - which are caused by earthquakes and the fires, explosions, tsunami and landslide that are caused directly by the earthquake within the limits stated in your policy.
- With Compulsory Earthquake Insurance, TCIP aims at providing the insureds with the opportunity to go on with their lives after earthquake.
- Expressing that "Earthquake will pass, and life will go on", TCIP provides maximum amount of insurance which is determined every year as per the increase in the construction costs. Maximum sum insured amount given by TCIP is 215 thousand TL for all building types as of 7 September 2019.
- The cost of Kahramanmaras earthquake - estimated total losses of 3.23 billion dollars (data for 12 June).
- Inflation affected TCIP strongly, combined with the devaluation of the currency.
- Most of the affected people in the country have already received payments for damages after the earthquake.
- The recent earthquake also brought into attention the safety of the buildings in the country - which are now inspected for safety and even consolidated.
Prof. Dr. Sinan AKKAR, Head Modeller, T-Rupt Modelling Company, Turkiye
- Kahramanmaras earthquakes - the ruptures occurred on the segments where M +7 earthquakes have not occurred for several hundred years.
- One of the first questions raised after these two events was: were these two events depended on each other or independent of each other? This was the first challenge we faced. Was the second event a triggered event by the first one or not? The question was important for insurers. Essentially, we found out that the first event triggered the second event, due to excessive stress. Once this was proven scientifically, we started working on the seismological features of these events, because this information would help insurers model it as efficiently as possible.
- If the loss estimations are for a building portfolio, the uncertainty in the spatial distribution of portfolio, as well as its granularity (in terms of structural types) will also be the other points of concern in loss modeling.
- The Kahramanmaras earthquakes challenge the loss modeling by the two sequential major earthquakes, occurring within a nine hour difference, that amplify the damage of the insured assets in the portfolio.
Interactive panel - Earthquake - how much more do we know about this risk?
Dr. Ing. Sever GEORGESCU, Senior Researcher at The National Institute for Building Research URBAN INCERC
- Lately, in Romania, the focus has been on the earthquake in Gorj county, but from the point of view of how we transmit information, perhaps we should insist that everyone in the area where they live must know the local seismicity, so as not to cause fears when they occur.
- At the level of Gorj county, the level of PAD insurance is low. It is not necessary to have an earthquake to benefit from a PAD policy, for example, but the inhabitants of Caras would have benefited from being insured to cover some of their losses.
- The PAD policy has a ridiculously low price per year. It's an amount worth paying for protection.
- We need to explain to the world that all over Romania there is seismic risk and there are cracks all over the bark, and some movement and consequences may occur from time to time
- We have to learn that in every field specialists and authorities have to do their job, including in construction. We have to trust the average quality that this chain of activities produces from design to execution
- Our Turkish neighbours have gone through the situation where everyone built as they wanted and earthquakes forced measures and controls on quality rules. In principle, after 1999 the quality of construction in Turkey has improved.
Mihai SERCAIANU, Coordinator, Founder MKBT: Make Better Association
- We have launched the e-cutremur.ro platform - people oriented and focusing on home safety.
- People don't have technical knowledge, they don't have economic or insurance knowledge - so, we started to explain to them, through this platform, what is an earthquake preparedness backpack, what it means to not be an extra burden for the intervention teams for 72 hours, what are the safe places in our apartments, how we meet our family in case of an earthquake, how safe is the building we live in etc.
- When we talk about risks, we tend to forget about the vulnerability of the buildings. We don't have databases of the buildings.
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