PAID Romania - a model for reforming the mandatory home insurance system in Kyrgyzstan

Initiated by the World Bank, a technical knowledge exchange meeting was held in Bucharest with PAID Romania representatives and a delegation consisting of high-level representatives of the insurance market and the Kyrgyz parliament, on the topic of the Romanian experience in building a compulsory home insurance scheme.

Organized as part of an experience exchange tour on the mandatory home insurance schemes against the risks of natural disasters in Romania and Turkey, the meeting in Bucharest aimed at transferring information on the functioning and technical details of the Romanian catastrophe insurance program, considered as a successful model that can underpin the reform and improvement of the similar system implemented in Kyrgyzstan.

A predominantly mountainous country, Kyrgyzstan is exposed to a series of natural catastrophe risks among which seismic and meteorological risks pose threats with a high potential to produce important social effects. Implemented three years ago, the local home insurance system faces a number of real technical difficulties that impede its efficient development and functioning. Coverage of an excessive number of risks - 18 risks, including common fire risk - procedures for certifying the occurrence of risks that are difficult to meet, lack of sufficient territorial penetration of insurance providers, etc. are some of the main shortcomings of the current system. "We are particularly interested in finding as much details as possible on the functioning of the Romanian disaster insurance scheme, so that we can take over the valuable elements of this experience in reforming our own system," explained Sanzhar MUKANBETOV, President of State Service for Financial Markets Regulation and Supervision, Kyrgyzstan.

"First of all, we need a more judicious dimensioning of the system so that we can access the reinsurance market and give financial stability to the state-owned company specializing in the underwriting of compulsory housing insurance policies in our country," added Nurlan BAIBOSUNOV, a member of Board of Authority.

"In order to fulfill its social role and to function on a financially sustainable basis, the mandatory home insurance system must focus on the risks that have the potential to generate, through the size of events and the impact of large masses of citizens, real social problems, "explained Nicoleta RADU, CEO, PAID Romania, how the Romanian system was configured. "In addition, the system must have both a broad distribution base and the preparedness required to manage a significant amount of damage in the event of a catastrophic event of great magnitude. Undoubtedly, a quality reinsurance program is essential to the stability of the system and its ability to fulfill its assumed role, "she added, explaining the steps that PAID Romania is undertaking to improve its own business.

"The World Bank is constantly supporting the development of schemes to improve insurance coverage for the risks of natural disaster. There is a wide variety of solutions around the world, each country having to set up a scheme that meets both its social needs and its economic, cultural characteristics," commented Luis ALTON, Financial Sector Specialist, World Bank.

The meeting of the two delegations in Bucharest was attended by PAID Romania specialists, representatives of the Financial Supervisory Authority and of UNSAR - the Romanian insurers' association. The Kyrgyz delegation was composed, besides MPs of the Committee on Economic and Fiscal Policy, of the members of the board of directors of the State Insurance Supervision and Regulation Authority and the management of the State Insurance Company, the state-owned market player that underwrites and manages the compulsory housing insurance. The meeting took place with XPRIMM support. The Kyrgyz delegation will also visit the next days TCIP - the Catastrophe Insurance Pool in Turkey.



Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles

KYRGYZSTAN: property insurance led 2018 year in GWP and paid claims

The State Service on regulation and supervision of the financial market under the government of the Kyrgyz Republic (supervisor) on February 8, 2019 conducted a meeting of the Executive Council, dedicated to the results of 2018 and tasks for 2019, according to the statement on the official website.

2019-02-14

KYRGYZSTAN: insurance industry is developing, only with difficulty

In May the Association of the Kyrgyz Insurers conducted an annual meeting, dedicated to discussion of the last year result. According to the participants of the meeting in 2017 the local market was developing gradually and the insurance volume growth amounted to 12.5 %.

2018-05-10

ON THE MOVE

Bulgaria: Boiko ATANASSOV appointed as FSC's head

The Parliament of the Republic of Bulgaria appointed Boiko ATANASSOV as Chairperson of the Financial Supervision Commission (FSC) on March 15, with 134 votes in favour, none opposed or abstained.

21.03.2019

TOP EVENT

Climate and cyber: two Cs with catastrophic potential and the insurance business - under debate in Vienna, on April 9

10 years after its inception, the Romanian mandatory dwelling insurance system has progressed and PAID, the pool underwriting and managing the mandatory policies is a strong and financially sound institution. "We are currently managing a reinsurance program worth EUR 920 million, with a pool of excellent reinsurers, more than half of them rated AA+, while the company's solvency rate is of 220%," recently stated Nicoleta RADU, CEO, PAID.

21.03.2019

Conclusions: TBILISI - the first Georgian International Insurance Conference

The first Georgian International Insurance Conference took place on 14 March 2019. The event put under scrutiny the current status and the future development perspectives of the local market, in an attempt of identifying the main growth opportunities. The forthcoming launch of the mandatory MTPL system was the most important topic on the agenda, as this new line of business has the potential to provide for a significant growth, but also to become a market disruptor.

14.03.2019

See all