Insurer Eureko gets burnt on EUR 6.6 mln Romanian cargo insurance claim

Insurance company Eureko, with a Dutch majority interest holder, was ordered to pay a EUR 6.6 million claim made by a Romanian clothing company based in Sibiu on account of a cargo coverage insurance policy. The decision was issued by the High Court of Cassation and Justice, at the beginning of December, and marks the final act in a ten-year trial. The beneficiary of this end of year present is clothing manufacturer Cochet S.A. The EUR 6.6 million is to cover the loss suffered following the destruction of a consignment of silk ties by a fire that broke out in the container. Eureko initially rejected Cochet’s claim for recovery of damages due to suspicions around the circumstances of the event. Eureko officials have expressed their intention of observing the court decision, with the company’s financial status allowing for the full settlement of the claim. At the end of 2011, Eureko had an available solvency margin of over EUR 8 million (RON 34 million) to cover damages on the general insurance segment. The Cochet SA settlement ranks among the highest in the history of local insurers. It is the equivalent of a third of the premiums underwritten by Eureko last year and twice the value of the total damages covered by Eureko in 2011. At the beginning of 2012, Eureko Insurance announced that it had managed to reach a 70 percent loss reduction in 2011 down to EUR 1.33 million (RON 6 million) while also benefiting from a slight increase in gross underwritten premiums. Cochet SA was founded in 1991. The firm temporarily interrupted its activity, before resuming operations in January 2011, according to the Romanian Ministry of Finance. The company’s profit and loss account for 2011 records a zero turnover, zero profit and approximately EUR 7,074 (RON 29,924) in losses. Ioana Jelea ioana.jelea@romania-insider.com (photo source: Arhivafoto.ro)