The Frenchman who has overseen Groupama's acquisitions andmergers worth half a billion euros on the Romanian market iscertain insurers charging low rates will operate increases.
Insurers charging very low prices in order to gain marketshare and are operating at a loss will drop this strategy over thenext few months, because the market is dwindling and the chances ofmaking a profit in the future, as their portfolio rises, have goneaway, says Denis Rousset, the Frenchman at the helm of localoperations of Groupama, a financial group that has invested overhalf a billion euros to gain the third position on the insurancemarket.
"I think dumping practices in insurance (charging lower pricesthan the market, which generate losses) will end after the firsthalf of the year. What you could afford when the market was growingby 20%, you cannot afford any more. When the market is rising, someinsurers resort to dumping and hope to cover these losses from theprofit they will make in a few years' time. Now the shareholderswilling to take losses are gone, because they know they won'trecoup them," Rousset, 44, explains.
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