December will be the month when competition among insurance companies will become fiercer than in any other period of the year because of the auto liability insurance (RCA) campaign.
For 4 weeks, insurers are expected to struggle as they attempt to gain as many customers as possible, with the largest part of investors being concentrated in the last month of the year.
The explanation: until 2005 RCA policies were valid until the end of the calendar year and therefore most were renewed during this period.
"December still represents a peak in RCA sales, though to a lesser extent than in previous years. Around 70% of annual sales are concentrated during this period," states Marius Onofrei, a communication manager with Allianz-Tiriac, leader of the insurance market and number four on the RCA market in 2006.
Insurers count on the significant market share they can gain by selling RCA policies, even though this business still makes losses or operates close to the breakeven point.
In 2006, insurers sold RCA policies worth almost 350m euros, up around 30% in euros against the previous year. "There are two reasons why the market will register growth by at least 30% this year: the rising tariffs levied by insurers and higher insurance coverage, along with the expanding car fleet," explains Onofrei.
Asitrans general manager Bogdan Stan considers that unlike in previous years, the main criterion in drivers' choosing an insurer will not be prices.
In parallel with rising gross underwritten premiums, the claims insurers settle for these policies will also go up.
Last year's leader of the RCA market was Asirom, with turnover worth almost 57m euros, down 9% year-on-year. At the same time, claims settled by the insurer stayed at the previous year's level. The situation is bleaker in the case of the other 4 players of the top 5, which saw claims settled double, while sales advanced at a much slower pace.
"(...) I believe insurers' payment obligations will continue to rise at a much higher rate than premium incomes," believes Onofrei.
Last year, Asirom gained the most from RCA, but the situation may change this year should the company's turnover on this segment continue to drop. Omniasig, which registered 44% higher sales of RCA policies last year, is likely to become the market leader.
In parallel with rising gross underwritten premiums, the claims insurers settle for these policies will also go up
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