Insurers pay more than 1 bn euros in car accidentsUpdated: 13-04-2010 | Business

Insurers pay more than 1 billion euros last year in car accidents, a two-digit growth, in the context of premiums collected from Casco and RCA (civil auto liability) policies stagnated, reads Ziarul Financiar daily on Tuesday.

Thus, total compensations paid by insurance companies for Casco and RCA policies reached 4.48 billion lei (1.06 billion euros), which is a growth by 21 percent against 2008, according to data provided by the Insurance Supervisory Commission. Calculated in euros, the growth in the total value of compensations stood at 5 percent. More than a half of this amount goes in the spare parts industry; a third goes to car repair services.

For several years already compensations for car accidents have grown much faster than policies subscribed, which makes this business line non-profitable. Thus, every year shareholders in insurance are forced to inject tens of millions of euros in their companies.

'This trend is very worrying for, if the damages continue to grow, and subscriptions to stagnate, we will eventually face a financial dead-end. This is a rather dramatic situation we are in right now, with shareholders having been injected money in a non-profitable business for years,' Radu Mustatea, general manager of Astra, one of the largest insurers on the domestic market, controlled by businessman Dan Adamescu (70 percent) and the Austrian group Uniqa (27 percent), said.

Insurers subscribed premiums in car insurance worth 1.3 billion euros last year, a 3 percent growth on the previous year.

'In order to balance growing damages there is need of increased tariffs. Moreover, insurers have already started to take measures to control the damages in a more strict manner,' Mustatea said. The price for Casco and RCA grows by 10-15 percent on an annual basis, Agerpres informs.