ROMANIAN INDEPENDENT
MOTOR SERVICES
ASSOCIATION____________________________
INSURED
INSURER
SERVICE UNITS
1
High incidence of traffic
accidents
____________________________
•
Approximately 10% of the mandatory insurance
clients in Romania are registering damages
•
In 2012, the annual payment on mandatory
insurance segment was of approximately 100 euro
•
The average auto damage is of approximately 1100
euro
2
The insurance companies
understate the cost of repairs
granted to their
clients
____________________________
A lot of insurance companies understate the cost
of repairs granted to their clients .
There are insurance companies in Romania, with
important market share on mandatory insurance
segment, which pay between 75-25% of the repair
costs calculated by the auto service.
The percentage granted as compensation is
calculated freely by the insurance company, based
on the service unit cost estimations.
3
Standard collaboration agreement
between an insurance company and
a service unit ____________________________
a) Dacia and all
other brands, 0-4
years old, the
components
price is 75% of
Audatex
b) Dacia and all
other brands, 4-8
years old, the
components
price is 50% of
Audatex
c) Dacia and all
other brands, >8
years,
The
components
price is 25% of
Audatex
4
Abusive investigation of
claim files
____________________________
45%
55%
Abusive
investigation
of claim files
for 90 days
Regular term
of
investigation
90 days is the term
by which the
insurance
company is legally
deferring payment
of damages.
How can one insurance company in Romania have
an incidence of 50 to 60% cases of suspected fraud,
while other insurance companies have an incidence
of approx. 10%?
Simple: this way, the insurance company is legally
delaying compensation payments.
5
Reducing the repair costs
____________________________
No institution verifies if the claim inspectors of the
insurance companies have:
• Technical studies in auto field
• Practical experience carried out in a service unit
IMPORTANT!
There is the pressure made by the insurance company
management to reduce repair costs, under penalty of
salary reduction of the employee, if these costs exceed
an average value established by management.
With how much objectivity and accuracy the
compensation costs will be calculated?
6
Competition Council’s
Report
____________________________
According to the report issued by the Competition Council, page 102:
“Regarding the relationship with insurance companies on whether they
were denied the payment of damages when they use a service unit that
is not on its list of approved repairers, 41% say yes in case of
mandatory insurance and 32% in case of optional insurance”.
So, different situations, but a surprisingly large number of insurers that
have had problems because they didn’t went to a car service unit
recommended by the insurance company.
41%
59%
RCA insured who
were denied
payment
32%
68%
CASCO insured
who were
denied
payment
CASCO insured
compensated
RCA insured
compensated
7
Service units position
____________________________
10%
Acceptance of
the insurance
companies
condition
90%
Service units that
don't accept the
insurance
companies
conditions
Service units have two
options:
• They
accept
the
situation and sign the
agreement under the
conditions imposed by
the
insurance
company, even if the
contract affects the
interests of their client
insured
at
that
insurance company
• 10% of repair services do not accept the conditions
imposed by the insurance company and this way ensure the
quality of repairs, but will have decreased workload, and
will often face the situation where they have to sue the
client and / or insurance company for full payment or
partial payment of their claims
8
The insurance market
____________________________
The insurance market in Romania is in an
extremely difficult situation because:
• The entire insurance market has a grey reputation
among insured’s, insurance companies losing
their most precious element: CUSTOMER
TRUST
• Next month will be founded a new institution to
supervise the insurance market
• Auto Services have a bad reputation in Romania
because of the increasingly low quality of the
repairs
9
Consequences
____________________________
1.
In Romania, the auto insurance market stagnated in 2012 after a strong
contraction in the previous years.
2.
According to a report issued by the Competition Council in 2011, the
share of counterfeit parts was estimated by the service unit at 35%, well
above the European average, estimated at approx. 10%. Our estimation
is that in 2012, the share of counterfeit parts increased to about 40%.
3.
The number of repair companies shuted down in the last two years is
approx. 22% of the total repairing units.
4.
The satisfaction of the Romanian insured is continuing to drop, and the
confirmation comes from the increasing number of complains (up by
65% in 2012 compared with 2011), registered by the Insurance
Supervisory Commission.
5.
The current insurance supervisory institution - Insurance Supervisory
Commission, will be replaced by a new one in April 2013 because of
“problems found, especially lately, in the insurance market” – quote
from the Romanian Government Ordinance no. 93/2012.
10
Conclusions
____________________________
Agreements between auto service units and insurance
companies are affecting the customers regarding repairs
quality.
Romanian model of “ business in auto insurance “ is one
that has proven to be totally wrong.
In mid-April 2013, in Romania will be establish a new
insurance supervisory institution - the Financial
Supervisory Authority (FSA), because of “problems
found, especially lately, in the insurance market” – quote
from the Romanian Government Ordinance no. 93/2012.
11