Optimistic forecasts for RCA 2021 insurance: Insignificant increases

The Vice President of the Financial Supervision Authority (FSA) makes optimistic forecasts for the MTPL 2021 insurance. According to him, the increases will not be significant, limiting themselves to about 10-12%.

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The proposal to introduce direct settlement for MTPL policies is still under public debate, and the next step is a government decision, said Daniel Apostol, spokesman for ASF.

“Mandatory direct settlement is still under public debate and we are waiting to see the next step the government will take. I can confirm, as Cristian Roșu, vice-president of ASF, said, an impact study carried out at the sector level, on the current data and the current market context, do not conclude that it would be an explosion of prices at RCA, but an estimate of increase with about 10-12%. ASF Vice President Cristian Roșu said that in other market conditions, if a new equilibrium is reached, we should see only a few extra percentages in tariffs “, said Daniel Apostol.

Optimistic forecasts for RCA 2021 insurance: Why price increases are expected

The direct settlement option allows the person purchasing a MTPL policy to claim compensation directly from their insurer. The process is faster, and the insurer will recover the money from the insurance company of the guilty driver.

Consumers now have a price-oriented mentality. In the future, however, insurers will no longer be able to afford MTPL policies at a ridiculous price due to the new legislation, which requires the payment of compensation within 10 days of its notification by the insurer of the person activating the policy, and the penalties are harsher. chosen because of the enforceability of the letter of indemnity, if the payment period is exceeded.

Thus, prices for MTPL policies could increase significantly for some insurers, who currently practice the lowest MTPL rates. They will have to align with the average market price in order to be able to cope with subsequent payments with compensation.

Earlier, analysts anticipated a significant increase in RCA policies, following the introduction of direct settlement.

Source: Promotor by www.promotor.ro.

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