Cristian FUGACIU, General Manager, MARSH Romania
Property insurance rates which also include "the loss of rent" (business interruption) ranged last year between 0.07% and 0.09% of the insured sum. In 2009, the insurance rates have decreased significantly, the range covered being between 0.045% and 0.065% of the insured sum.
XPRIMM: How do you evaluate the evolution, in the first half of this
year, of the demand for property insurance for office buildings?
Cristian FUGACIU: In general, developers and builders of these buildings
are international companies that have a good culture of insurance. In
the first months of the year in progress, in terms of MARSH mediations
on the insurance market for office buildings, we recorded an increase.
XPRIMM: How is the premium for a class A office building rated?
C.F.: Property insurance rates which also include "the loss of rent" (business
interruption) ranged last year between 0.07% and 0.09% of the insured
sum. In 2009, the insurance rates have decreased significantly, the range
covered being between 0.045% and 0.065% of the insured sum.
The mentioned quotes are for new office buildings, built to current standards.
Another policy that owners of office buildings are buying is the one
of civil liability (related to third parties and to tenants). Prices
for this policy vary depending on the limit of compensation, therefore,
for a limit of EUR 1 million, the premium may vary between EUR 2,000
and EUR 3,000, and for a limit of EUR 3 million, the premium may even
reach EUR 5,000 - EUR 6,000.
Some major office buildings in Romania are also insured against the risk
of terrorism and loss of rent due to terrorism. Premiums for such policies
have fallen a lot as compared to last year. Thus, in 2008, for a limit
of EUR 15 million, the insurance premium reached around EUR 20,000. In
2009, for the same insurance limit, the premium may be EUR 15,000 or
XPRIMM: What are the risks against which the owners of office spaces
should be insured?
C.F.: In general, policies that best cover the risks which an office
building can confront with are: Property, Loss of Rent (Business Interruption),
Terrorism and Civil Liability (related to third parties and to tenants).
XPRIMM: What are the tendencies occuring now regarding office space
C.F.: Even if the economic recession hit directly in the construction
market in general, for the moment there are enough office buildings that
were put in use or are to be put in use in the months to come. In the
same sense, the insurance culture of the clients on this segment, but
especially the fact that throughout time this insurance has proven useful,
make our expectations for this segment to be positive.
With the economic crisis, we notice a change of attitude from the customers,
regarding reducing costs related to insurance. This reduction is usually
done through the internalisation of risks. Thus, the companies decide
how much risk they can take and how much they can raise the value of
the deductible and to eliminate some types of insurance.
We believe that the development of this segment is closely related to
the number of office buildings, but we also believe that developers understand
the utility of insurance, and the fact that there were enough claims
in the past has done nothing but convince them accordingly.
XPRIMM: Thank you!
| Published on 09.07.2009