Insurance Third-party auto liability prices to surge

“Insurers that have segmented tariffs will increase these by 50 to 100 percent for those under 30, a high risk category on the RCA segment, and those whose car was damaged at least twice in 2008,” an insurance company representative told Business Standard. This segment makes up only 30 percent of the car insurance market. The remaining two thirds is the no fault insurance segment. However, year-end RCA campaigns are the best source for insurers to increase liquidities and market share. For this reason, the tariffs announced to CSA have not been made public, as each company is waiting to see the prices of his competitors. “Insurers are allowed to change prices they have announced to CSA by plus/minus 25 percent,” an insurance broker said. He added that brokers are encouraged to sign as many policies as possible, as “tariff hikes are expected every hour.” According to data released by CSA, the average premium paid for RCA insurance in the first nine months of 2008 amounted to RON 290 (€75.5), compared to RON 260 (€67.7) year-on-year. CSA Vice President, Constantin Buzoianu, recently said that the growth rate of damages paid for RCA policies exceeds the growth rate of subscriptions for this type of insurance. This shows that current tariffs are not covering obligations assumed by insurers. Sources on the market said that several companies will have lower tariffs next year for certain client segments compared to this year, while others will not change their tariffs.