Mesut YETISKUL: "The campaign for selling mandatory household insurance has had two significant effects upon the household insurance segment"
 The moment of review for the household insurance in Romania is getting closer, as the results of mandatory household insurance system and not only are going to be reviewed on the occasion of ICAR - International CAtastrophic Risks Forum 2011.
"The campaign for selling mandatory household insurance has had two significant effects upon the household insurance segment. Firstly, it has helped increase awareness of household insurance among the population, of the coverage it provides, which resulted in increasing the degree of penetration of voluntary household insurance. Secondly, fierce competition generated by this campaign has contributed to a significant reduction in voluntary insurance premium rates", said Mesut YETISKUL, General Manager of CREDIT EUROPE Asigurari, company Partner of ICAR 2011.
"Major promotions were based on low premium rates - 0.1% of the real value of the house for a full range of risks, additional coverage included in the price, or increased commissions for agents, brokers", pointed out Mesut YETISKUL.
Among the topics to be addressed during the 8th edition of ICAR, the main European forum dedicated to catastrophic risks, the current form of the Mandatory Household Insurance Law will also be found, in the context of changes that could be brought to improve the system.
"Firstly, the companies' right to offer protection for risks of catastrophic nature should not have been limited, it rather should have been the foundation of establishing a reinsurance Pool, to accumulate the greatest part of the exposure to the catastrophic risks at the level of the whole country, in terms of policies sold by all insurance companies authorized to underwrite household insurance, following to reinsure this portfolio in order to diminish marginal costs", stated the leader of CREDIT EUROPE Asigurari.
"Thus, a reinsurance program in the whole country would be cheaper than a disparate reinsurance program, for each insurance company. In time, the financial capacity of such a reinsurer would be growing and the cumulated capital would remain in the country", he added.
In the first half of 2011, the number of household insurance policies concluded by CREDIT EUROPE Asigurari was almost 22,000, corresponding to a volume of underwritten premiums of over RON 3.3 million. In the same period last year, the number of such concluded policies was nearly 7,000, according to a volume of written premiums of over RON 3 million.
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Author: Oana RADU
on 04.10.2011
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