2023-07-07 09:35:51
Romania is in the group of countries most vulnerable to earthquakes, according to EIOPA – the European Authority for Insurance and Occupational Pensions – which produced a picture of the gap in insurance protection for natural catastrophes, according to a report by the National Bank.
Seismograph Photo: INQUAM Photos / Octav Ganea
The risk of flooding is highlighted by the National Bank of Romania as one of the most important physical risks in Romania as a result of climate change, with an impact on the population and companies with headquarters located in the counties affected by this risk. At the aggregate level, regarding all meteorological risks, the insurance coverage rate in Romania is only 2 percent, being in the group of the most exposed countries in Europe.
Conform the ECB-EIOPA joint analysis for Policies to reduce the gap in insurance coverage of extreme weather phenomena, Romania, together with Bulgaria, Hungary, Greece, Italy, Malta, Cyprus and Lithuania, is in the category of below 5 percent average level of insurance coverage of economic losses caused by climate causes in Europe. The best situation, with over 50 percent coverage, is in the Netherlands, Denmark, Norway and Iceland.
The segment of insurance companies continued to grow in 2022, reaching a level of total assets of 37.99 billion lei (+17 percent in annual terms). The modest size, although constantly increasing, places the insurance sector last in the financial system with a share of assets of 3.8 percent (December 2022).
The insurance market in Romania is dominated by the general insurance segment, which represented 83% of the gross premiums subscribed in the first three quarters of 2022, a fact explained by the obligation of some car (RCA type) and property (PAD) insurance policies. The situation reflects both the low level of financial education, says the National Bank Report, which notes that an increase in the insurance market depends on increasing consumer confidence and adapting the offer of insurance products to the local market.
Compared to the EU member states, Romania continues to be in last place in the EU in terms of the ratio of gross premiums subscribed to the number of inhabitants for life insurance (16.22 euros per inhabitant, compared to the average of the countries in the region103 of 87 euros per inhabitant).
The combined rate, calculated as the sum of cumulative costs relative to premiums earned, also shows a worrying value for Romania. The value of the indicator is the highest in the EU, 106 percent (Any value above the unit indicates losses for insurers) being followed by France, with 100 percent.
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