Insurance brokers support increased prices on MTPL. Minimum rate should be between EUR 160 and EUR 180
 The MTPL policies prices represent one of the main sources of concern for brokers and insurers. "Exchange rate depreciation and inflation pressures are other factors that should influence the MTPL tariff level, because their fluctuations are directly reflected in the claims cost. Last year, for example, if we were to consider only the increase of VAT and we still should have seen an increase of prices practiced for this type of insurance", said Bogdan ANDRIESCU, President of UNSICAR, during the meeting of the association, at Eforie Nord.
Thus, according to representatives of insurance brokers, the minimum premium for MTPL insurance, a segment that owns more than 37% of total underwritings in general insurance, should reach a level of EUR 160-180.
"The claims frequency and the average premium show very clearly that the minimum technical premium on MTPL should be EUR 128. At this level we are talking about a premium "unloaded" by other costs. Normally, the minimum MTPL rate should be somewhere around EUR 160-180. I think that all insurers that sell below this level are at a loss", explained Ion MOISE, Managing Director, E-Claims Management.
Calculations show that the minimal technical premium, that shows the frequency and average claim on MTPL, should be of EUR 128, provided that the expected claims frequency is 8% and the average claim is estimated at EUR 1,600 (* technical premium = claims frequency X average claim = 0.08 X EUR 1.600 = EUR 128). If at the technical premium we also add the expenses of insurance companies, the minimum level of policies should reach EUR 160-180. The conclusion of the brokers was that all insurers that are currently selling below that level are registering losses on the MTPL segment.
"We have noticed, at least in September, a stop of the price decreases on this market segment. However, in parallel with the prices we see for sale, we should look at the services offered to clients by insurers", pointed out Victor SRAER, Managing Partner, OTTO Broker.
Author: Mihai CRACEA
on 04.10.2011
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