Household insurance - a source of growth for the Moldavian insurance market
 The introduction of mandatory household insurance could boost the increase of the insurance market, but also of the awareness of people regarding the benefits and usefulness of such a policy. Currently, only 1% of the approximately 1 million homes in Moldova are insured, although the risks the households are exposed to are more striking, and the frequency of the catastrophic risks is increasing in the last years (especially floods).
For example, "last year, of the total number of houses destroyed by floods, none was insured. The government was forced to resort to economic agents to remedy the situation. If households of the calamity affected people had been insured, things would have been solved differently. Because of modest income, we cannot force people to insure their households, as it happens in other countries", according to Veaceslav IONITA, President of the Budget and Finance Committee, from the Moldavian Parliament.
 A first step for the AOL introduction was the project initiated by the World Bank, according to which Moldova would be part of the Catastrophic Risks Insurance Fund - which will be created in the region of South-Eastern Europe and in Caucasus. Currently, the project is blocked at the Government.
"The introduction of AOL could generate significant growth potential for the insurance market in Moldova", said Victor GAICIUC, President of the insurance company ACORD Group.
 A first impetus for the property insurance segment (including household insurance) was generated by the introduction in 2008 of the mandatory insurance for the pledged property when contracting a loan.
"Implementation of the law according to which persons who contract a bank loan guarantee with a property which must be insured has offered significant growth opportunities for the profile market", has emphasized Oleg MAGLA, Vice Manager, VITORIASIG Asigurari Generale.
Yet, the financial crisis has not spared the Moldavian economy, either, so people are much more reluctant to getting a loan, and insurance costs are far from being a priority. Last but not least, once the global crisis has started, banking companies have tightened the conditions for credit products.
Author: Oleg DORONCEANU, Vlad BOLDIJAR
on 07.07.2010
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