The insurance market, between regain of trust and return on profit. See here the main statements at the UNSAR conference
The insurance market has been in loss for 8 years ,and, this year, it is also faced with a decrease of the confidence level from clients or potential clients. Thus, regaining the consumers’ confidence, but also the health and profitable increase of the industry counted among the topics debated by the specialists in the field within the Romanian Insurers’ Conference, organized by UNSAR.
Remi VRIGNAUD, President of UNSAR – the Romanian National Union of Insurance and Reinsurance Companies, declared that it is a mystery for him how the company can resist after 8 years of loss.
“I could not provide high-quality services to the clients, if what I get is loss. On the medium and long term, it is impossible”, Remi VRIGNAUD said, adding that the companies focus only on the short term, the medium and long-term perspective being a problem.
“Being focused more on profitability, from my standpoint, is an absolute necessity, in order to bring confidence in the insurance system. To me, a company firmly, fairly and profitably managing the clients’ money represents the basis for which we can survive. Of course, in collaboration with a supervisory authority that should support this standpoint. We should not be embarrassed about making profit. This is the basis for success and for providing clients with stable and constant quality. I think this is the most important thing after 8 years of loss. We need stability, financial balance and profitability”, the president of UNSAR indicated.
In his turn, Marius POPESCU, Vice-president of UNSAR, thinks that confidence can be regained on the insurance market.
“It is easier to gain confidence than profit. The investments in education, confidence and image are necessary. This pro-consumer attitude should increase the share of the insurance industry in the GDB, which will ultimately result in profitability”, Marius POPESCU said.
Cristian FUGACIU, CEO of MARSH Romania, specified that incomes and profitability are obtained on account of the client, by means of the insurance premium that they pay. “Since there are offers on the market with different prices and the clients do not understand the offer difference other than in terms of price, they choose the cheapest offer. I think prices should be settled down somehow. It is a paradox to me – the prices are made by the insurers, they are offered by the insurers, the adjustment as well should come from them. Dumping prices should no longer exist on the market and, if they exist, the Authority should intervene here in order to see how they can be supported”.
He indicated that the insurance industry has always been at a not very high confidence level. “I think we should speak about the gaining confidence. What happened lately made the confidence degree drop even more. The clients say that the insurers are those who promise, take the insurance premium and, when they have to honour their obligation of making the payment of the indemnification, they do not do it as the customers would expect. If we want to see what needs to be done in order to regain or gain confidence, I think we should look at the reasons for the clients’ discontent and, eventually, to the complaints that get to the FSA”, Cristian FUGACIU added.
Likewise, Viorel VASILE, CEO SAFETY Broker, underlined that, at this moment, the effects of 8 years of loss are seen.
“We see what the consumer is confronted with when they try to make a damage inspection for a mandatory civil liability insurance policy for motor vehicles (RCA). We met several variants on the market. The insurance companies are more and more inventive. Firstly, a postponement is made – it lasts 1-2 weeks to get a confirmation that you can open a damage file. When you manage to open the damage file, you get some text messages of propositions where, as compared to the estimate given by a service unit, 30-50% of the amount is proposed to you. It is your decision whether you accept or not. When you do not accept, it is clear that you should make a complaint to the FSA. Or, there is one more variant, where nothing is told to you, you just make the repair work, you for it, but you do not get the money. Of course, you can make a complaint to the FSA. In broad lines, that is what 8 years of loss means on a car insurance market. Everybody tries to postpone the payment as much as possible and to pay as little as possible”, VASILE explained.
“If we do not try to change these things, to have content clients, we will definitely have fewer and fewer clients. I think one of the reasons why the market drops is because the insurance coverage degree has dropped, at least in terms of the mandatory civil liability insurance for motor vehicles (RCA)”, he added.
Sorin MIERLEA, President of ANPCPPSR, stated that it shows that the insurance industry and the representatives of the industry still look at some indicators, without having a medium and long-term predictability. “When we have education and information and a responsible citizen, it means that the system works”, he underlines.
At the same time, Angela MANOLACHE, Manager, Advisory, KPMG Romania, considers that a “best practice” is missing on the Romanian market – a business dimensioning or alignment of the business to the risk conditions in which it operates. Practically, the lack of profitability and the exposure to unsustainable increase also derive from here.
“In order to gain confidence, it takes concrete actions, deeds, not words. But beyond them, there should also be transparency in communication. In this respect, a great step for the market is the implementation of IFRS as financial reporting framework, which brings a common language for the market. At the same time, the Solvency II directive shall also bring increased transparency”, he also said.
William VIDONJA, Head of Single Market & Social Affairs, INSURANCE Europe, also stated that a proper regulation framework is needed at European level in order to have a reliable sector. At the same time, the European initiatives should ensure the diversity of the markets, since there is no prototype of the consumer matching the entire Europe, and the clients’ demands and the regulations are different from one market to the other.