PAID Romania marked 10 years of activity on the Romanian market
The event took place in 7 March, in Bucharest, and gathered the company's international and national partners, bringing into debate the current situation of the mandatory household insurance system in Romania.
"With the help of all our partners, to whom I wish to thank for all their support, PAID Romania became a stable, balanced company. For the next period, we have to overcome three challenges, and the first one is to gradually increase the penetration degree of the mandatory household insurance policy from the current 19% to 40%, while increasing our capacity and maintaining a stable portfolio. The second challenge is to remain prepared to deal with a major disaster, and the third, to increase the consolidation of PAID Romania through new stakeholders", Francois COSTE, President of PAID Romania, declared.
Organizing educational and informational campaigns represent one of the activities through which PAID Romania aims to increase Romanians' awareness regarding the role of the mandatory household insurance policy for their financial protection. On 4 March, the company launched a new initiative, based on an ample media project, taking place in multiple stages throughout the year. One of the campaign's objectives is declaring 4 March "The National Day of Natural Disasters Awareness": supporters of the campaign can sign an online petition to help the initiative.
"The strong memories that the earthquake on 4 March 1977 left on Romanians' minds was a starting point of this initiative. We aim to generate a campaign which will increase their awareness regarding the risk of natural catastrophes and their potential impact. We chose to focus on earthquakes, because this is the first risk we think of when we talk about natural catastrophes, but floods, as well as landslides also have a high impact. Through this campaign, we wish to change Romanians' perspective, from fear to awareness and responsibility", Nicoleta RADU, CEO, PAID Romania, explained.
The necessity of increasing the penetration degree of these insurance products was also pointed out during the "Building the Future" Conference, where the situation of the Romanian property insurance segment was analysed. Moreover, during the event, the efforts put forth by PAID Romania with the purpose of increasing the quality of its activities were also brought into attention. The company constantly aimed and continues to focus on qualitative growth, through partnerships with prestigious institutions, associations and companies, such as The Technical University of Constructions, The National Institute for Earth Physics, TERRASIGNA and many more.
According to data presented by Adrian MARIN, President of UNSAR, the property insurance segment still has growth potential: in the third quarter of 2018, property insurance represented only 15.2% of the non-life insurance market in Romania.
Moreover, the household insurance segment (mandatory and voluntary household insurance policies) represented 40.8% of the total property insurance market. However, despite this low penetration degree, an UNSAR study showed that homeowners are aware of the risks threatening their homes: for example, 56% fear earthquakes.
The impact of seismic risks and the measures that can be taken to mitigate it were among the topics analysed during the conference. Episodically, Romania is affected by earthquakes originating in the Vrancea area, which generates, every century, 2 to 3 powerful earthquakes, with magnitudes between 7 and 7.5, like the ones in 10 November 1940 (7.4 degrees) or 4 March 1977 (7.2 degrees), Dragos TOMA-DANILA, Researcher at The National Institute for Earth Physics, explained.
Bucharest remains one of the most exposed cities to earthquakes, especially considering economic damage. Professor Radu Sorin VACAREAN mentioned that, in the case of an earthquake with an intensity between 7 and 8 degrees, the economic damages to residential buildings might reach up to 8% of Romania's GDP (between 3 and 12 billion euros). According to presented data, it is estimated that 550 days would be necessary to build 95% of Bucharest's housing stock before a 7 degrees earthquake, and 2000 days in the case of an 8 degrees earthquake.
In the case of major disasters, to evaluate the situation in inaccessible areas, insurers can use earth observation data/ satellite images, Codrina Ilie, TERRASIGNA, pointed out. Moreover, multiple surveys of the very same location can reveal subtle changes that reach beyond the perception of the human eye. Insurance companies are using geospatial technology and EO products and services in different stages of their business: from assessing risk to set premiums levels, to expanding markets, to managing claims and identifying frauds. Satellite images help insurers to better understand their risk exposure particularly at a time when claims on severe weather damages have risen by 10 fold in the past decade.
Matthew EAGLE, Managing Director, Head of GC Analytics, GUY Carpenter talked about PAID Romania's efforts, together with its partner from the reinsurance market to better evaluate the earthquake risk's impact on Romanian household stock.