Tarrifs for RCA insurances to record an increase by over 30%

Most of the insurance companies have raised the tarrifs for the RCA policies with 30-40%, and for Casco insurances with over 20%. Although, in the European countries the costs for mending vehicles decreased, in our country have been doubled. The statistics of the Road Police show that the number of accidents has alarming increased, and the insurers witness to an explosion of damages frequency.

Because of the rise in price for manual labor services, rise in price for the spare parts, rise in price for fuels and because of the damages that keep on increasing, starting with the beginning of the current year, the RCA insurers have increased the tariffs between 30% - 40%

According to the norms of Insurance Supervisory Commission (ISC), the minimum limit of compensations for 2009 is established to a level of at least 300.000 euro for material damages produced in one and the same accident, no matter of the number of damaged persons and of at least 1.500.000 euro, in case of injured persons or decease. The limits of compensations established by ISC represent a double of the level of 2008 and a triple of the level of 2007. Thanks to the increase of the compensation limits ISC anticipates an increase of the auto policies tariffs up to 50% in 2008 and 20% in 2009.

“The RCA insurers didn’t record sales and try to recover the losses by increasing the premiums. We are expecting to decrease the tariffs, but the service is more expensive than in Germany or Austria, it increased at least one more time. While in the Western European countries costs for mending cars have reduced, as the manual labor as the cost for spare parts, in our country have doubled. In what concerns the frequency of the damages, these have increased considerably, and the ones that involve victims became alarming”, Catalin Stroe, director of marketing within Asirom VIG states.

In the first three months of 2008, damages have increased with 34,25% on the Casco class and with 41% at the level of the RCA market. The statistics of the Road Police reveal us that in the first eight months of 2008 there have taken place over 8.000 road accidents, as many as took place during the entire year of 2007. The dynamic of severe accidents, as main factor of the damages recorded, was of 14% in 2007 against 2006 (8.203 accidents), while the number of deceases caused by road events has recorded an evolution of 5,28%, up to 2.712. Also, the road accidents from 2007 have generated 6.779 severe injured persons, more than 17,14% against 2006, and the number of the persons easy injured was of 2.513, in increase with 12,08%.

The insurers have diversified their methods expecting to reduce the incidence of damages. Most of the insurance companies that sell Casco policies offer significant discounts for the clients that didn’t have accidents, for women that have a more cautious behavior when driving, for the drivers with a length of service more than five years, these being able to easily avoid the events in traffic. The franchise is also one of the compulsory procedures applied to the Casco policies by most of the auto insurers. “Among the factors that could contribute to diminish the auto damages and that must be taken into account is noticed the improvement of the roads and road education. It was noticed the fact that the traffic on highway determines accidents 10-20 times less than on the other roads. The national roads and the express ones must be brought at the traffic conditions from the highway. In Western there are separator bands in order to avoid the frontal impact, in case of overtaking, the cause of the most severe accidents ended with victims. These separators would mean some minimum investments with immediate results in reducing the overtaking or return causing of accidents. There are also rings of the big cities, accelerating or undercrossing bands. The Pitesti Ring has significantly reduced the number of accidents in the city. An undercrossing doesn’t worth more than a house of 50-60.000 euro. Marking two bands out of three bands from the national roads, and at every two-three kilometers to change the overtaking band on every direction, would mean another procedure, not at all expensive, that would reduce the loss of human lives. Not the last, it must be outlined the road education, that in many Western states, takes place both in schools and on TV”, Catalin Stroe explains.

At the end of the first halfr, the auto insurances have a weight of 75,2% of the total of general insurances, meaning 2,686 billion lei. The volume of the RCA policies increased with 17% against the same interval of 2007, and the one of the voluntary insurances Casco with 39,7%. In 2007, the auto insurances (RCA+Casco) generated revenues of 4,125 billion lei, representing 72% from the the general insurances market. The damages on this segment raised to 2,42 billion lei, representing 76% from the total of the paid compensations for the general insurances.