Insurers Transfer Risks After Fighting On Auto Liability Segment With Very Low Prices

06.02.2011 By Ciprian Botea

The ten biggest general insurers transferred premiums worth 358 million lei (around EUR85 million) to reinsurers in the first quarter of 2011, up 56% from a year ago.

Most reinsurance contracts were sealed for auto civil liability insurance policies and real estate insurance against fire and natural disasters.

Premiums worth over RON120 million were transferred on the auto liability segment alone, namely one third of the total.

"Insurers' prudential policy has started showing. Car policy problems are quite challenging for insurers and I believe that claims registered in the past have persuaded companies to rely more on reinsurance," commented Valentin Tuca, general manager of AON Romania insurance broker.

Insurers have tried to balance their auto insurance portfolios because this is the segment with the highest claims rate. Over 10% of the auto liability insurance contracts generate losses for insurers, double the European average. Insurers were exposed to auto liability insurance losses in the first quarter because of the 20%-25% decline in the average premium.

BCR Asigurari (with RON51 million) and Asirom (with RON38 million) transferred the biggest volumes of auto liability premiums to reinsurers, according to data provided by UNSAR, insurers' professional association.

The top ten companies transferred premiums worth more than RON100 million generated from real estate insurance contracts, around 55% of gross premiums underwritten on this segment.

Allianz-Tiriac transferred premiums worth almost RON41 million from property insurance contracts, while BCR Asigurari passed on premiums worth almost RON20 million. (EUR1=RON4.1342)