INTERVIEW Unexpected effect of price hikes at the pump on the RCA market: “It's possible to have fewer accidents” / How expensive policies have become this year

Sorin Mititelu, the vice-president of the Financial Supervisory Authority (ASF), says in an interview for HotNews that “it is possible that this increase in prices of products and services, related to compensation, will be compensated by a slight reduction in the frequency of claims, that is, fewer accidents”, which will lead to “a relative stability of RCA prices”.

Almost 8 out of 10 Romanians who renewed their RCA car insurance, for a period of 12 months, took more money out of their pockets in the first three months of this year compared to the same period last year, but the severe price increases (over 30%) affected a limited number of policyholders, according to the latest data, presented in an interview for HotNews by Sorin Mititelu, the vice president in charge of insurance from the Financial Supervisory Authority.

“The bankruptcies of recent years have reduced confidence”

HotNews.ro: Mr. Mititelu, beyond the complicated international situation, the war in Ukraine, and more recently the one in the Middle East which has already led to an increase in fuel prices, we have just entered an internal political crisis. How can such a situation of political instability affect the insurance market? What prices can increase?

Sorin Mititelu: I would like to make a comment that is general in nature and does not only concern the insurance market in Romania. The economy works according to some objective, natural laws. And Romania's economy is in a convergence process and on an obvious growth trend. So, regardless of what happens in the short term, in the case of Romania's economy, expectations can only be of economic growth, expansion, convergence towards the economic performances obtained in the other economies within the European Union.

I could say that, in the case of the insurance market, this convergence or expansion is even more accelerated, given the fact that we have a protection gap, which we can see from evaluations based on numbers, a gap greater than that of other countries near us, which have also entered this process of growth, of alignment with the general evolution of the European economy.

The degree of penetration, for example, which can be measured by reporting gross insurance premiums to Gross Domestic Product, in the case of Romania, is somewhere around 1.5%, while almost all countries in the European Union have over 2%.

– How do you explain the situation in Romania, taking into account the population, income and standard of living?
– Yes, there is a question we have to ask: why, however, are we below the level already achieved in markets similar to ours? The insurance market is a market where trust is clearly a very important element. And perhaps events in the insurance market over the past 10 years have delayed this natural evolution.

– Are you referring to bankruptcies that lowered confidence?
– Yes. And two, I think there are also cultural factors that make a difference between different societies and, in our case, I think we also have an influence determined by how we look at the future, how we prepare for what is to come.

We are more inclined to wait for the future to come to us and then see what we do, how we do, in other words, and less to prepare ourselves for what this future may be, those unknown things that may affect us. Insurance is a solution for such situations, but the preference is still to look for solutions rather ex-post, that is, after the event has happened.

“There will be a paradox here. Especially in the automotive area”

– So you think that in the short, medium term, all this political instability won't affect us at all?
– In the insurance market, the influences are, however, much lower, because we have this gap to recover, it is enough to look at the figures representing the results of the last years and we see a growth rate of this market somewhere close to 10% year on year.

– Didn't the Gulf War that affected fuel prices also increase RCA prices?
– There will be a paradox here. Especially in the automotive area, it is possible that this increase in prices in the area of ​​products and services, related to compensation, will be compensated by a slight reduction in the frequency of claims. That means fewer accidents.

– Fewer accidents because there is less traffic?
– Yes, it is a correlation that is observed not only in this case, being a correlation that can be observed by analyzing other markets during periods of economic crisis.

– Have you noticed this yet?
– It's too early.

– How will this “paradox” be reflected in the evolution of RCA prices?
– In the immediate next period, the reaction of the insurers will be to use assumptions in estimating the future value of the severity of the damages, of increasing the prices of the goods and services associated with the indemnities to be paid.

At the same time, the estimate regarding the evolution of the other important factor in determining the insurance premium, the frequency of claims, i.e. the number of accidents, will remain one based on the recent history of claims, i.e. without significant changes.

So, in the immediate next period, there will most likely be updates to the tariffs in the sense of their increase, and in the next phase, the evolutions related to the frequency of claims will be taken into account in the calculation of the tariffs. As I mentioned, it is expected that their evolution will be a positive one, in the sense of their decrease. The effects produced by the two factors will cancel each other, totally or partially, which will lead to a relative stability of RCA insurance premiums.

Obviously, being a product price that is based on future developments, insurers can make the adjustments mentioned earlier, anticipatory, depending on one's risk appetite, experience and expertise acquired to date.

It should be noted that the two previously mentioned phases are usually measured in calendar months, not in days or weeks.

RCA prices in the first 3 months: 78% increased in price

– In one interview given to HotNews late last year you admitted that two-thirds of drivers who renewed their RCA policies between July and September, after the price cap was removed, paid more than in 2024, even if they didn't have an accident. For some, prices have increased by 40%. How have RCA prices evolved this early in the year?
– Yes, we have recently analyzed the evolution of RCA premiums for renewed policies, related to contracts valid for 12 months and, of course, those that have not had any change regarding the profile and the geographical area in which they operate, so that we have a 100% comparability.

This is the entire population represented by the policies that were concluded in the first quarter of 2026, which came up for renewal, after being concluded in the same period last year.

Of these total, 78% had an increase in the RCA premium, and 21% had a decrease in the premium. What is worth noting next, extreme situations are relatively few. In fact, out of the total portfolio, only 5.7% of these policies saw growth of more than 30%. And in terms of declines, there were declines greater than 30%, but as a share of the total portfolio they were somewhere around 1.1%.

The situation covers the total of 152,000 policies renewed at 12 months, where the profile has not changed and where we can really see what the changes have been in the market in terms of pricing.

Moreover, if we look at an evolution of the first average, so an indicator that reflects the entire portfolio, and make a comparative analysis, the increase in the value of this indicator is over 7% compared to June 2025, respectively by 9% compared to March 2025.

But he is an indicator. It reflects an evolution of the entire portfolio. Compared to June 2025, prices have increased on average across the total portfolio by 7.46%. In the case of cars, however, the average increase was 14%.

What can also be observed is that this growth was not steep, but rather linear. There are also players in the market, for whom this evolution was much more moderate. But obviously there were also higher prices, otherwise we wouldn't have this average of 14% for cars and 7.46% in total.

This was largely due to the need to update the rates, as some of the players obviously had rates set before the cap, i.e. at the beginning of 2023, or even slightly earlier, at the end of 2022, even if they had some updates afterwards.

And then, it was automatically necessary to update its rates to re-enter the normal operating levels for any financial product, that is to have a balance between income and expenses.

– After the City Insurance and Euroins bankruptcies, Romanians are also blowing in the yogurt. Can you guarantee today that there is no other major player in the market at risk of insolvency?

– Among the companies under our supervision, I declare on this occasion that we have no problem confirming that the situation is stable and that they operate under normal solvency conditions.

– Last year we witnessed a first in the RCA market: an insurer supervised in France, Axeria Iard, climbed into the top 3 in Romania. This means that it came with very low prices, it is known that in Bucharest, the city with the most expensive RCA policiesGrawe also has the most customers but also among the lowest prices. On the other hand, the biggest bankruptcies of City and Euroins also started from the lowest prices, for which the two insurers did not have enough funds to pay the claims. How well capitalized is this French insurer? Are you seeing signs of concern?
– I would recommend that before you compare two companies, you should compare the RCA reference rate. This is the source of information that includes information about the possible prices to be applied on the RCA market in Romania, prices that are calculated with appropriate methodology by a specialized and reputable entity.

That information regarding the reference rate is used both in the system of the high-risk insured, but also represents market information in Romania. Everything there is representative of our market and has a foundation or is based on an objective calculation and abundant data.

– Okay. You said you were pushing for supervised insurers.

– Yes, for those in Romania, yes.

– We have 3 branches of external insurers, Axeria, Hellas Direct and Anytime, supervised not by ASF, but by the authorities of the respective countries. How safe should Romanian policyholders feel?

– Do you think the Romanian should be less or more worried than the one from France or Greece?

– However, we also had the Dallbogg case from Bulgaria which was banned in Romania..

– Rather induce the idea that we should not trust other prudential supervisory authorities. Which is not right. From a prudential perspective, the solvency indicators, capital and liquidity requirements are the same and we can have no doubts about how the supervisory activity is done in these countries.

– However, there is an increase in income and policies sold by these companies outside of Romania. Are you also seeing an increase in complaints?

– It is directly proportional to market shares. But I have to say one thing here too. The share of companies operating under FOE (freedom of establishment) or FOS (freedom of services) license in Romania in total gross premiums subscribed to RCA increased from 0% to 20%, a level that has been maintained for almost 3 years. So they will stay around 20% anyway. 80% of premiums are made by companies registered and supervised in Romania.