Alexandru CIUNCAN: We continue and amplify the steps we started a few years ago, to bring insurance closer to Romanians and the business environment, so that our country's economy becomes more resilient and financially protected in the face of the risks and multiple crises we are currently going through.
I joined UNSAR in 2018 with the confidence and belief that the insurance industry has an important role to play in Romania's economic and social development. Thus, among our priorities for the next period is to increase Romanians' confidence in the insurance industry by intensifying financial education actions - a strategic pillar for us, where in recent years we have been making sustained efforts, especially aimed at young people, especially in the digital area. But I prefer to let our actions and projects do the talking.
XPRIMM: The protection gap is considerable in Romania - both in non-life and life insurance. Realistically speaking, are there solutions available for Romanian insurers to reduce the deficit and contribute to insuring the overall society's resilience?
A.C.: Independent studies conducted at the request of UNSAR show that 44% of Romanians say they are very well or well informed about insurance in general. However, we are talking about perceptions. But, even so, we must also look at the 56% who do not consider themselves informed. In this context, joint, sustained efforts are needed at industry and government level to educate the population about the benefits of insurance and its role. At UNSAR, together with our members and partners, we are constantly running such initiatives and financial education campaigns. Even if, so far, we have managed to reach millions of Romanians with our information messages, we are only at the beginning. Financial education is a marathon, not a sprint.
To this educational component is added the financial one - Romania's population continues to be vulnerable to everyday risks, generated by various unforeseen events, such as illness or accidents. We have a significant protection gap for many families in Romania, amounting in total to 620 billion lei. Thus, the difference between the money a family has at its disposal and the money it would need in the event of an undesirable situation is considerable, the amount needed being more than 110,000 lei.
In order to reduce this growing protection gap of the population, UNSAR and the industry are campaigning, for example, for the need to establish an incentive tax regime for life insurance policies with an exclusive protection component. It is important to say that the introduction of such tax relief is a necessary measure for a future in which every Romanian can have access to insurance and be protected against the unexpected. In fact, similar measures to encourage the purchase of life insurance with a protection component have been taken in the past by other European countries.
XPRIMM: The Romanian insurance market has been confronted with many challenges during the past years. Where does the market stand at this point and what can UNSAR do to support its sustainable development in the next years?
A.C.: The insurance market has grown steadily in recent years, but the industry's main challenges remain: the reputational pressure generated by the exit of CITY Insurance, a company that was not a Member of UNSAR, and the shortage of population protection mentioned above. In order to respond to these challenges, we have intensified both our communication and actions to support the industry's position to secure, develop and diversify the insurance market.
In addition to financial education campaigns, we are constantly conducting nationally representative market surveys to better understand the needs of the Romanian people and their perception of risks, we are producing a show hosted on the online platform of one of the best-known TV channels - and much more. All this is aimed at supporting market development and being closer to customers.
I would also mention, as a factor in the development of the industry, digitalisation, where significant investments are being made by companies to respond to new consumer needs, and the importance of attracting young people into the insurance industry and making it a top employer.
In this respect, we have developed several projects at UNSAR level. One example is the "ASF Olympics", organised in partnership with ASF - the Financial Supervisory Authority. This national financial education competition was dedicated to all students in grade 11 this school year.
We also ran projects in partnership with ISF - Institute of Financial Studies and will continue to pay more attention to attracting "fresh forces" to the industry. One example is the "Insurance Academy" project, aimed at students, where they have the opportunity to find out directly from people in the industry what insurance product development, claims management and, not least, what career prospects insurance companies offer.
We also support the acceleration of innovation in the industry. For example, there is increasing talk of a new generation of insurance products, such as Affinity products - linking a policy to a product or service. It's a new approach to insurance - one with significant potential.
XPRIMM: What are your expectations for the Romanian insurance industry in 2023?
A.C.: We expect that the perception of Romanians about insurance will continue to translate into an increase in the number of those protected by an insurance policy, whether we are talking about health, life, home, etc. There is a growing interest in insurance, as shown by the studies we conduct.
Let me give you an example: we have recently observed on the insurance market in Romania that there is a growing concern of the Romanians for health insurance. Thus, according to the sociological research we carry out, Romanians used voluntary health insurance (AVS) more than 620,000 times last year, twice as much as in 2020. The number of contracts, which even the press has written about recently, is perhaps less relevant, because we are talking about group insurance, where on one policy you can have thousands or even tens of thousands of insured people.
I believe that the AHV market continues to grow steadily and in a dynamic that we see maintained in 2023, leading insurers to diversify their portfolios and develop more and more in this direction.
Similarly, we see a growing interest in home insurance. Let's not forget that we faced in 2021 an average of 19 fires per day that burned down the homes of Romanians, and in 2022 the figure unfortunately increased to 23. Moreover, climate change is also making its presence felt in our country, and the negative effects produced by it should lead us to protect ourselves financially as well as possible.
However, only 1 out of 5 homes is insured, even though Romanians seem to be aware of the risks to which they are exposed. It is clear that we cannot go on like this forever.
In this context, we are working intensively to increase the penetration of home insurance, together with ASF and PAID. But a change in the specific legislation to boost the uptake of home insurance - starting with compulsory and continuing with voluntary - is crucial to overcome the current momentum. Romanians need to understand how important it is to insure their homes.
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