The Motor Insurance Conference, which took place on 27 June during FIAR - The International Insurance-Reinsurance Forum, covered current challenges and future perspectives on the motor insurance segment, from digital solutions to improve efficiency in motor insurance to the new mobility and the impact of electric vehicles' proliferation on this insurance sector.

The Conference was supported by Recrex, eClaims Assistance, Chiric&Chiric, and ASISOFT as Partners.

Main statements

PART I

Claudiu NASUI, Member of the Chamber of Deputies of the Romanian Parliament

- Politicians do not understand very well what insurance is all about, and there is an attitude of suspicion. Many colleagues have the impression that insurance is a black hole, they do not understand that insurance systems are risk management systems.

- In the motor segment the claims are artificially high, perhaps because of certain car repair services or certain judges. Any higher claim means higher premiums.

- It is contradictory to believe that one can lower prices on MTPL if the paid claims on this segment do not decrease.

- If we promoted more economic education, we would also have better projects and systems that would allow us to evolve in the long term.

Madalin ROSU, President, BAAR

- The Amiablia app comes with some new elements for the final consumer. We need to talk more about this app, because customers need to be informed about it.

- I think that brokers, being the first interface which customers encounter, are the ones who should increase the awareness regarding this application.

- There are solutions that, if we all start promoting them, can be successful. For example, UNSAR has recently launched a road safety campaign called "Coalition for Road Safety" and it is a great first step between several associations that have the same goal: to reduce the number of car accidents in Romania and, most importantly, the number of deaths on the roads.

Ovidiu CIOBANU, Legal Department Coordinator, BAAR

- European Directive No 2118/2021 amending Directive 2009/103/EC relating to insurance against civil liability in respect of the use of motor vehicles and the enforcement of the obligation to insure against such liability seeks to ensure an adequate level of protection for injured third parties, i.e. the harmonisation of national legislation.

- The Directive must be transposed into Romanian law by the end of 2023.

- This directive brings a number of changes. For example, based on technical realities, it was felt that the concept of vehicle needed to be modified. It also introduces the exclusion of vehicles used at sporting events from the MTPL insurance, but under certain conditions - namely, if the organiser of the event has third party liability insurance.

- From December 2023, the limits for compensation on MTPL will increase - the minimum limit for property damage will rise from EUR1.22 million to EUR1.3 million per accident, and the limit for personal injury and death will rise from EUR6.07 million to EUR6.45 million per accident.

Mihai NECRELESCU, Risk Manager, BAAR

- As far as claims history and guarantee structures are concerned, we are at the forefront of European changes - we already have the FGA in place and we already have claims history in place since 2017.

Mihai NEACSU, Partner Attorney, Neacsu & Asociatii

- In Romania, there is no emphasis on protecting the persons who suffer damages, we completely forget about ways to protect the insured in case of bankruptcy, while at European level, the concern is for the insured person.

- EIOPA recommends that only compulsory insurance, or insurance policies considered important/ esential, should be covered under guarantee schemes. In Romania, all insurance policies are covered by the guarantee scheme.

- The Romanian insurance industry does not have a plan in place to deal with the bankruptcy of a large company.

Interactive panel

Luka PRELEVIC, Head of International Expansion, Head of Romania, Hellas Direct

- We are very happy to participate in the Romanian market. We expect the growth on the market to continue - certainly, the growth rate might not be the same, due to inflation, the penetration of the insurance industry.

- The Romanian consumer which we feel, is digitizing. We see a lot of bright things in Romania.

- We believe there will be some new products to be launched.

- On short term, the biggest impact we expect is the expiration of the Euroins policies in autumn.

- In Romania, we consider our relationship with brokers a huge asset. They do a great job of working with the consumers. This can be a lever to develop positive changes.

Liviu CHIRIC, Partner Attorney, CHIRIC & Asociatii

- There is a lot to be done in terms of prevention on the Romanian market

- It seems absurd to me that after 33 years you don't have speed control on main roads, knowing that speed is one of the main accident factors.

- Most contractors who have transport companies have not taken into account the risks on the MTPL segment.

Alexandru COSTACHE, Deputy Director Claims, OMNIASIG VIG

- Under challenges for the MTPL market, I would include technological progress, which has made windscreen repair more and more complex and this is reflected in the cost of insurance.

- Another phenomenon I have noticed since Q1 of this year is the double digit increase in replacement cars, covered by MTPL claims. The changes from last September are making their presence felt in this area.

- We are faced with unreasonable services trying to pull on their side as much as they can the legislative provisions that are supposed to protect the injured person, not these entities.

Claudiu SOFRON, Motor Insurance Specialist, UNSAR

- The biggest cost of an insurer is the cost of claims

- For each accident, motor insurers in Romania pay more than 2000 euros. Every day, about 2 million euros are paid out in Romania under MTPL policies.

Aurel IVAN, Country Manager, AUDATEX

- On the Motor Hull segment, we are generally talking about new vehicles, and in their case we are talking about more expensive parts. On new models, claims tend to be higher

- On MTPL, more than 35% of vehicles are over 15 years old.

Part II

Menekse UÇAROĞLU, CEO, IUC Group, Türkiye

- Inflation in Turkey - From 2004 until 2017, inflation was under control at 8-9%. Between 2018 - 2020, it was at a range of 15%-20%. By the year end 2021, inflation increased up to 36%. Policies to boost economic activity during Covid-19 crisis, fueled by devaluation of TL and increase in oil/gas prices, finally increased the inflation to 83,5% in 2022 September. Budgeted inflation estimation was appr. 21% and this increase of inflation with appr. 60 pts gap vs the current situation was not at all expected.

- The impact of inflation was devastating.

- How does the insurance market handle inflation from a technical aspect? It was very important, for the Turkish Insurance Market, to have fundamental strengths for early detection of deterioration in cost drivers. Determination of loss cost, the amount of money an insurer must pay to cover claims, including the costs to administer and investigate such claims, was a major target in this ever-changing and increasing cost atmosphere. Market needed to rely on the information coming from ?Insurance Information & Monitoring Center? for their instant monitoring capabilities on cost drivers to make data driven decisions. Companies applied Instant and segmented tariff management and dynamic execution. Continuous improvement in claims initiatives to create competitive advantage, i.e. increased focus on mobile repair.

- Companies with large motor portfolios have special teams. Actuarial data is analyzed at the end of the month by underwriting, claims and technical teams. At the end of each month actuarial teams analyse data, have insights from claims teams and underwriting teams to make accurate estimations for the pure premium in all detailed lines. During the month, review meetings are held by reserving, finance and underwriting teams. Especially during 2021 and 2022, as a result of constantly increasing inflation, technical teams worked on tariff updates regularly, sometimes daily.

- The Insurance Information and Monitoring Center is a portal ensuring that all the insurance policy and claims data, as well as data from the other insurance applications such as the reports of accidents resulting in material claims, loss adjuster reports, and MTPL insurance offer information are being analyzed. The portal can be used by the insurance companies and the authorized users at public institutions.

- In Turkey, there is high quality market data for production in motor lines and it is crucial to get benefit from this data by the required technical capabilities.

- Underwriting teams work closely with claims team, monthly, half monthly and even daily.

- Desperate times call for desperate measures. An extraordinary solution to cope with inflation: An insurance company bought 4-million-dollar worth spare parts as stock and worked with agreed service providers as repair shops and used pre-purchased spare parts for the CASCO claims.

- To cope with inflation, insurance companies have launched new products with deductibles, valid in agreed partner repair shops. Also, companies offered new additional services bundled to motor casco products, such as free Automobile check-up, free winter tire storage, oil & gas discount, free car wash etc. The extra services have low costs for the insurance companies but are very valuable to clients.

Boguslaw SKUZA, Member of the Supervisory Board, Telematics Technologies, Poland

- Poland focused on various road safety measures, projects and legislative measures to reduce car accidents.

- In Poland, we are witnessing an increase in telematics insurance.

- Except Italy, no country in Europe has a high success rate in implementing telematics insurance.

- Telematics Technologies offers a wide variety of services, including crash detection and reconstruction.

- The success of telematics depends on how it is introduced on the market.

- Telematics allows for the collection of following types of data: detailed trips data and personal driving style, lawful driving and smooth driving indicators, distraction analysis, visualisation of online data for every profiled driver, data by road categories, data by time periods, histogram of trips lengths day by day.

- Telematic users need to get something back - better premiums, cashback etc.

- LINK4 KASA WRACA (CASH BACK) has been on the Polish market since April 2017. 82,000 active users have already participated in the program. Offer assuming up to 30% insurance premium refund for safe and smooth driving with navigation app.

- According to data from September 2018, within 14 months since launching the LINK4 CASH IS BACK programme, drivers using the telematic solution have collectively generated bonuses with the value of over half a million zlotys. The record-holder has in his/her profile the bonus with the value exceeding 1,200 zlotys. The data obtained after closing the first settling periods shows that as many as 90% of users want to continue their participation in the programme.

Ion MOISE, CEO, eClaims Assistance

- BAAR has been extremely attentive to all the elements and has managed to implement in September 2022 the online Amiabila

- I would like to implement another system, built by eClaims, which refers to an integrated solution for online settlement of damage claims, from the occurrence of the event to the compensation (100% online).

- I believe that, in the near future, all claims settlements will be exclusively online

- We have created eClaims Web, which aims to use the data from Amiabila and to settle the damage case. The application takes the data from Amiabila and processes it for the purpose of establishing the compensation - the application also takes data about the accident - it has a Google Street View tool implemented -, it can send all the photos, it can make an estimate as automatic as possible, together with Audatex, or a classic evaluation, by a specialist.

Maria GANEA BOGHIAN, Managing Director, ASISOFT

- ASISOFT developed digital products, some even before the market and they were not properly digested, that's why we had to go back and wait for the right moment.

- Our most popular application is the auctioning of damaged vehicles and the goods inside them.

- We also have the part of used parts because at European level old parts mounted on old vehicles are accepted for repairs, and this makes us optimistic.

- We try to focus on second-hand parts obtained from dismantling.

- Even if the programming costs are very high to achieve a complete system on the scrapping side, the benefits will be very high for the whole market

- We want normality, trust and partnership.

Mihai NECRELESCU, Risk Manager, BAAR

- Financial or claims applications require a higher degree of knowledge. They have legal implications, but we must bear in mind that we are now planting the seeds for the next generation

- The use of the applications launched by BAAR makes us optimistic, the level of adoption is good

- I believe in a more technological future

- We want to simplify processes, be attentive to consumer wishes, be stable and accessible. We have new projects, but more and more attention is going to finishing existing solutions.

Alin ENESCU, Project Manager, BAAR

- We have a very large number of users in the Amiabila application

- We have more than 100,000 accounts created and more than 9,000 accidents registered