RO insurance: City's collapse will make a bigger splash than Astra or Carpatica did
Troubled Romanian insurer City Insurance currently has a market share of almost 45% in the mandatory car insurance segment (RCA), the biggest market segment by far, according to Mădălin Roşu, president of the Romanian Motor Insurers' Bureau (BAAR), Ziarul Financiar reported.
This is more than the bankrupt companies Astra Asigurări and Carpatica Asig had at the time of their collapse, he stressed. In conclusion, the costs of a possible bankruptcy of the City Insurance market leader could be higher - but this also depends on the portfolio structures of the three companies.
Until the end of June 2021, BAAR paid EUR 44 mln on behalf of Astra and EUR 62.7 mln on behalf of Carpatica. After payments amounting to EUR 106.7 mln, BAAR still has to pay EUR 12.1 mln for Astra and EUR 25.5 mln for Carpatica (a total of EUR 37.6 mln).
City Insurance, the leader of the insurance market and the dominant player in the insurance area RCA, is on the verge of seeing its operating license withdrawn - a firm step toward its bankruptcy. While the license's withdrawal is operated by the financial market regulator ASF when the insurer fails to meet the capital requirements, the bankruptcy can be decided only by the court.
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