Years after the collapse of Romania’s largest motor insurers, CITY Insurance and EUROINS Romania, the market still feels the impact. Over 500,000 claims have been filed, with payouts totaling RON 2.6 billion (~EUR 520 million), now reflected in MTPL premiums paid by millions of Romanian drivers, the FGA’s 2024 report shows.

According to the 2024 annual report of the Romanian Policyholders Guarantee Fund (FGA), as of December 31, 2024, the FGA had registered 641,800 payment claims related to all failed insurers. After validation and consolidation, 611,646 were deemed unique, while over 30,000 were merged or closed due to duplication or incomplete data.

Out of the total, 502,823 claims were linked specifically to CITY Insurance and EUROINS Romania. The Fund has so far resolved 60% of these, amounting to 303,112 finalized claims.

Overall, FGA paid RON 2.6 billion (~ EUR 520 million). In 2024 alone, FGA disbursed a record RON 1.28 billion (~ EUR 257 million) in compensation related to CITY and EUROINS cases - accounting for 98% of its total payments for the year. This included:

• CITY Insurance: 89,838 payments totaling RON 827.8 million (~EUR 166.5 million)
• EUROINS: 45,071 payments worth RON 455.6 million (~EUR 92 million)
• Older bankruptcies like ASTRA and CARPATICA Asig accounted for RON 24.9 million in payouts.

FGA’s 2024 activity also covered significant subrogation-related payments: RON 234.7 million (~EUR 47.22 million) went to Romania’s Motor Insurers’ Bureau (BAAR), and over RON 220 million (~EUR 44.3 million) to CASCO insurers and other creditors that initially covered damages from their own resources and later recovered the sums via court rulings.

In total, the Fund processed a record 150,882 claims in 2024- up 57% from 2023 and 119% from 2022 - without increasing its staff count, which remained constant at 236 employees.

Digitalization and Strain

To cope with mounting pressure, FGA prioritized digitalizing its claims processing in 2024. Enhancements included enforcing chronological handling of claims, improving transparency via an online portal, and introducing tools to protect claimants in cases involving bodily injury or death.

Despite these efforts, more than 200,000 claims related to CITY and EUROINS remain unresolved. Additionally, claimants seeking more than the legal RON 500,000 cap are pursuing recovery through insolvency proceedings. At the creditor table, claims amount to:

• CITY Insurance: RON 2.17 billion (~ EUR 436 million)
• EUROINS: RON 670 million (~EUR 135 million)

FGA itself has filed for recovery: RON 1.8 billion (~EUR 362 million) from CITY and over RON 215 million (~EUR 43 million) from EUROINS, based on preliminary creditor lists as of June 2024.

Heavy financial losses despite higher revenues

The FGA closed 2024 with a financial loss of RON 375.5 million (~EUR 75.5 million) - down from the RON 2.55 billion loss posted in 2023. The improved result reflects both a higher number of processed claims and changes in provisioning policies.

The Fund’s revenues rose to RON 1.51 billion (~EUR 304 million) in 2024, a RON 283 million increase over 2023, primarily due to recoveries from liquidation proceedings. Expenses dropped sharply to RON 1.88 billion from nearly RON 3.78 billion the previous year, largely due to adjustments in specific reserves.

Despite visible signs of stabilization, the Romanian insurance sector remains burdened by past crises, and the road to full recovery is still long.