Important news for all drivers in Romania: there are several variants of RCA

After the bankruptcy of City Insurance, one of the most important insurance companies in the country, the companies operating on the Romanian market are struggling to cope with the huge gap left by the collapse of the company that covered almost half of RCA insurance sales. In this context, recently, important news was announced for drivers in Romania, who will benefit from several variants of RCA.

Important changes for drivers in Romania. Several RCA variants are announced

City Insurance has left a considerable gap in the compulsory car insurance market following its collapse. Prior to the bankruptcy, the company had come to control about half of RCA’s sales, which is why local companies remaining in the market are struggling to meet demand. Therefore, Romania has become interested in a new strategy, which allows foreign companies to operate through local brokers, through the “European passport”.

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One such company is Sirius International, which is part of a Swedish-registered group under the control of a Bermuda-based reinsurer. The company announced its intention to be included on the Romanian market based on the “European passport”. It allows any company registered in a European Union country to operate in another Member State, based on a simple notification or by setting up a branch, according to economica.net.

The options that Romanians will benefit from on the insurance market

Sirius is just beginning the steps that need to be taken to come to Romania, but the precedent has already been set in many other EU countries. The main interest announced by the company would be the area of ​​guarantee insurance, which remained available following the bankruptcy of City Insurance. The extremely low prices charged by the collapsed company a year ago led to its expansion in the Romanian market. Its bankruptcy has led to the lack of options for tens of thousands of entrepreneurs who have contracts with state institutions or companies.

Compared to other entities in the insurance field, Sirius International has proven to be a company with a solid portfolio, being the leader of a union that operates on the world’s insurance exchange, Lloyds. Its core business, reinsurance, has led to an increase in gross written premiums in 2020 from € 3.6 billion to over € 6.6 billion.

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On the other hand, other RCA insurers are also in an advanced stage of entering the Romanian market, through partnerships with local brokers. One of them is a French-American company, which recorded a share of over 10% of sales, being in the top RCA.

The MGA system

Through the MGA (Managing General Agent) system, regulated by an EU Directive, the one who will sell insurance will do so through a broker or consultant authorized for these activities. The payment of damages and the establishment of reserves become an attribute of the broker, these tasks being shared between the insurer and the broker. This system would be used by Hellas Direct in Greece and Wefox in Germany. Wefox is a small company operating exclusively in the insurtech system, while Hellas Direct, which operates exclusively online in Greece, is a major name in the RCA market. A French company, Axeria Iard, also entered Romania, having a direct branch in Bucharest.

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