Romania: introduction of the mandatory direct reimbursement procedure in motor insurance is the hot spot for 2021
Despite the challenging pandemic context, Romanian insurers managed to end 3Q2020 with an overall GWP growth of 4.8%, Cristian ROSU, Vice President for the Insurance - Reinsurance Sector within the market supervising authority (ASF) said on the occasion of the traditional forecast meeting organized by XPRIMM each year.
The "XPRIMM Time for Business - The Challenges of 2021", the first conference this year dedicated to the local insurance market, took place on Monday, January 25, in a hybrid format broadcast live by the YouTube channel XPRIMM. Top market professional reunited to asses the market perspectives for 2021.
"I see 2021 as a year of increasing respect for the consumer, as well as a year of sustainable growth of businesses, both for insurers and insurance brokers," ROSU added also emphasizing that the current year should also be one for the start of a gradual balancing of the market portfolio that would decrease the "unhealthy" domination of the motor insurance lines. "We must focus on other lines of business, to see the growth potential in home and health insurance. Home insurance, for about 2 years, has stayed at about 20% coverage. Health insurance has had a high relative increase in the last 2-3 years, which led to the end of the first 9 months of 2020 for these policies to represent 4.1% - 4.4% of the total market. This shows us that health insurance can be the star of the market in 2021 as well."
The planned introduction of the mandatory direct reimbursement (DR) procedure is one of hot spots for the current year. The change, expected to be introduced through a government emergency ordinance, is currently on the Ministry of Finance's agenda. In addition to making participation in the DR system mandatory for all motor insurers, the new piece of regulation introduces deadlines, of 10 days, for the clearing operations, higher fines etc. According to the draft form of the new regulation, there will not established a market clearing institution, but the fulfilment of the financial obligation with the 10 days deadline will be supported by the introduction of an enforceable title on the letter of reimbursement. Although some of the company's CEOs are rather reluctant with regard to the financial flows established for the DR system, it is still to be seen how the adopted regulation will look like and how the passing first few months will validate it.
Author: Daniela GHETU
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