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Evgeny POTOKOV, SCOR: The biggest P&C line of business [in Romania] cannot be unprofitable

"I think that stability is essential for insurance and reinsurance companies alike and, in order to be active in the market, we need a transparent and stable legislative framework, otherwise the rules are not clear and it is hard to plan business activities in the market with too many uncertainties", Evgeny POTOKOV, Senior Underwriter SEE, SCOR, explained during the Motor Insurance Conference taking place at FIAR 2017, presenting the company's perspective, as reinsurer, on the MTPL market in Romania.

After pointing out the issues of the local MTPL market, like the fact that, in February 2017, the European Commission observed that the price cap of MTPL premiums in Romania is not in line with EU law, or th fact that ASF - The Romanian Financial Supervisory Authority announced reference prices for mandatory car insurance, which are 3% to 17% lower compared to the maximum tariffs introduced by ASF six months ago, Evgeny POTOKOV pointed out that "the biggest P&C line of business [in Romania] cannot be unprofitable, unsustainable and unpredictable in the long term".

"Last year, we saw some positive signs. Unfortunately, it is again quite difficult to assess the exposure, to understand how the market will react in the future, so we are quite concerned regarding the situation. We hope for the best, we hope for some appropriate solutions for all the actors", Evgeny POTOKOV added.

According to SCOR's representative, there are three aspects that could be quite important for bringing more stabilization on the MTPL market:
  • The Romanian judges and courts shall receive binding and precise guidelines on how to treat cases regarding MTPL and how to determine appropriate amounts for moral damages;
  • Loss compensations for moral damages shall be restricted by law (if nothing else helps)
  • Lawyer's contingency fees shall be restricted (clearly defined, limited by legislation and transparent to all parties involved)

Author: Adina TUDOR on 24.05.2017

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