London, April 29, 2024 (FinanceFlashNews) – In recent years, a wave of bankruptcies has shaken the Romanian auto insurance market. Several major insurers have collapsed, leading to billions of lei in payouts, rising premiums, and a government-imposed freeze on prices.
Which insurers have gone bankrupt in Romania?
Among the most notable insurers that have failed in Romania are Astra, Carpatica Asig, City Insurance, and Euroins. These insurers engaged in unfair business practices, offering low premiums to gain market share, which became unsustainable when the number of claims increased. They also failed to adequately manage risks and ASF was not sufficiently vigilant in overseeing them.
State Guarantee Fund Had to Pay Out Billions
The bankruptcies of the insurers have had several negative consequences in Romania. The State Guarantee Fund had to pay out billions of lei in compensation to injured parties, KGFB premiums have risen significantly, and the government was forced to freeze premiums temporarily to mitigate the impact on motorists. In response to these events, new legislation has been introduced to stabilize the car insurance market. The new legislation introduces several changes, including the introduction of a deductible, the possibility of paying premiums in installments, advance compensation for damages, and increased fines for driving without compulsory insurance.
The future of the Romanian car insurance market is uncertain. The new legislation should stabilize the market, but it is important for ASF to ensure that it is properly enforced. Motorists should carefully consider the different offers from insurers and choose the insurance that best suits their needs and risk profile.
List of bankrupt insurers in Romania
Among the most notable insurers that have gone bankrupt in Romania in recent years are:
- Astra: In 2015, it collapsed after ASF found that it had underestimated insurance risks and ordered it to increase capital.
- Carpatica Asig: In 2016, it failed due to financial problems and ASF withdrew its operating license.
- City Insurance: In 2021, it went bankrupt after its Dutch owner failed to pay the expected capital injection.
- Euroins: In 2023, it collapsed due to insufficient capital and ASF withdrew its operating license.
It is important to note that the situation in the Romanian car insurance market is complex and constantly evolving. This article provides a general overview of the recent bankruptcies and the new legislation, but it is always advisable to consult with a qualified professional for specific advice.
