Why are the RCA prices for trucks so high: What do the transporters advertise, what does the internal data of the ASF show and what solutions are on the negotiation table

2024-01-12 15:17:00

“When I registered my first truck in 2018, the RCA price was somewhere around 4,500 lei, and today I pay 13,500 lei for the same truck, although I had no events and I reached the B5 class,” he declares for HotNews.ro , Alex Pertea, one of the transporters who came to protest in the Capital. An internal analysis of the ASF, consulted by HotNews.ro, shows why the RCA costs so much for trucks and what solutions might be discussed next week to end the protests.

Transporters’ protestsPhoto: Inquam Photos / Octav Ganea

The transporters who are in the third day of protests, who have blocked traffic at the entrances to the Capital, accuse that they can no longer bear the high price at RCA, which has increased year by year, in some cases and despite the fact that they have not caused any damage.

• “For trucks over 16 tons, RCA insurance for 12 months costs between 18,000 and 20,000 lei for class B0 (first registration), while in Poland, for example, a similar RCA policy costs somewhere around 4,000 zlotys, the equivalent of regarding 4,600 lei.
• Prices in Romania are very high and have increased year by year. We hope to find solutions, next week, at the meeting with ASF”, says Alex Perțea, the representative of the carriers participating in the protest.

The representatives of the Prime Minister Ciolacu’s Chancellery had, on Thursday, at the Victoria Palace, a meeting with representatives of carriers from all areas of Romania, in which it was agreed that a working meeting between the representatives of the carriers and those of the Financial Supervision Authority (ASF) to find solutions to the RCA problem.

ASF’s internal analysis: Frequency of claims most influences the price of RCA on trucks

An internal analysis of the ASF carried out in this context of transporters’ protests, a document consulted by HotNews.ro, shows why RCA prices are higher for trucks over 16 tons, owned by legal entities, compared to the rest of the market.

The frequency of claims in the period 2018-2022 for the category “goods transport vehicles, >16t, for legal entities” was 19.1%, while on the total market it was 5.7%. In the same period, the severity of damage to trucks over 16 tons owned by companies was 15,933 lei, compared to 8,855 lei in the total market.

• “The strongest influence on the final value of the RCA tariff for the category “Cargo transport, >16ť” is the frequency of claims. This factor explains to a good extent the differences (in a negative sense) compared to the premiums charged by insurers in other markets in the European Union “, according to the ASF analysis consulted by HotNews.ro.

What RCA prices are the trucks in Romania

The evolution of RCA premiums for the same category of “cargo transport vehicles >=16 tons, legal entities” shows that, last year, the average RCA premium over 12 months for category B0 varied between a minimum of 9,135 lei (in July) and a maximum of 10,209 lei (in May).

On the other hand, the reference RCA tariff varied between 8,240 lei and 8,794 lei.

• “Therefore, both the first average and the reference tariff were relatively stable in the second part of 2023 (the value of the reference tariff published in December 2023 is 8,609 lei), and this situation will also be maintained in the course of the first quarter of 2024”, says the internal analysis of the ASF.

Over 50% of RCA truck policies are classified as high risk insured. Maximum premium – 12,000 lei

However, ASF data shows that there are problems, with many carriers turning to the high-risk insured procedure, managed by the Auto Insurers Bureau (BAAR), to obtain lower car insurance prices.

The high-risk policyholder procedure is the only legal leverage available to policyholders for cheaper RCA policies.

The Bureau of Auto Insurers (BAAR) says on its website that, according to the law, policyholders who receive offers from at least three different insurers for 12 months whose RCA premiums are 36% higher than the reference rate, related to the risk segment they belong to, are considered high-risk policyholders .

• These policyholders might apply to the Bureau of Auto Insurers (BAAR) which chooses an insurer who will sell them a policy at a price within legal limits.
• The problem is that people do not know that they are considered high-risk insured, nor do they know how to calculate their own risk premium, and brokers have no interest in helping them.

In the internal analysis of the ASF, consulted by HotNews.ro, it is shown that this mechanism is mainly used by insured persons in the “Cargo transport, >16t” category.

• “More than 50% of the insurance policies concluded in the last months by the policyholders in the category “Cargo transport, >16t” were included in the category of high-risk policyholders.
• The final premium in the case of high-risk insured persons who applied to BAAR is not higher than 12,000 lei.
• The rates charged by insurers for the category “Cargo transport, >16t” fall within a relatively large range (from single to double), for the same insured, being influenced by: the safety margins applied (which reflect the level of volatility of claims in the segment of which the insured belongs to); commercial negotiation margins; distribution costs; the bonus-malus system through its basic effect (at a high premium, applying the premium increase percentage leads to an even higher value in absolute terms).
• Paradoxically, but undesirably, through the management mechanism of high-risk policyholders, the reference tariff became the basis for forming the final premium of the RCA for policyholders in the “Cargo transport, >16t” category, according to the ASF document, consulted by HotNews.ro.

What RCA prices are on trucks in other countries in the region

The ASF analysis also presents some examples of RCA tariffs practiced on other EU markets for the “Cargo transport, >16t” category:

• Poland: RCA – produced by self-stater: 17,600 lei; RCA – part of the RCA+CASCO Package: 8,800 lei
• Latvia: 13,200 lei
• Hungary: 11,500 lei (average value, with a minimum of 6,000 lei and a maximum of 40,000 lei)
• Slovakia: 11,100 lei

Over 61,000 carriers called on BAAR last year. Most received lower RCA prices

HotNews.ro requested the situation of the insured who asked for help last year from the Bureau of Auto Insurers (BAAR), and the answers of the organization, whose members are all insurers that sell RCA in Romania, confirm the problems of carriers with high prices for RCA.

• “The number of requests in 2023 was approximately 67,000, of which 56,700 met the requirements to be included in the high-risk insured category.
• The number of requests from individuals for cars in 2023 was regarding 5,000, of which regarding 2,700 met the requirements to be included in the high-risk insured category.
• The number of requests from carriers (individuals and legal entities) for vehicles intended for the transport of goods (the category includes all categories, respectively under 3.5 tons, between 3.5-16 tons and over 16 tons) in 2023 was regarding 61,400, of which regarding 53,800 met the requirements to be included in the high-risk insured category”, BAAR officials told HotNews.ro.

According to the procedure, the allocation to high-risk policyholders is made equally for all insurers that issued RCA policies in the year in which the request is made.

BAAR officials also said that the allocations fell within the time limit provided by the procedure displayed on the BAAR website (art.18), respectively they did not exceed 20 days from the date of receipt of the request, if it was accompanied by all the documents mentioned in art. 17 paragraph (3) of the procedure.

What solutions does ASF take into account to reduce the RCA price for trucks

In the internal analysis of the ASF, some possible actions are outlined to reduce the final level of the RCA for insured persons in the “Cargo transport, >16t” category, as follows:

• Improvement of the “Bonus-Malus” system;
• Similar and common interpretation of some of the principles used in the calculation of RCA tariffs (mainly those related to segmentation and commercial negotiation margins);
• Monthly/quarterly payment of insurance premiums as a general practice.

Carriers want to conclude protocols with insurers from outside the country

The Confederation of Transporters (COTAR) also promises to present itself at the negotiation table with a solution.

Carriers want to conclude protocols with insurers from outside the country to sell them RCA policies at the reference rate of the Financial Supervisory Authority (ASF), said on Wednesday, Vasile Ştefănescu, the president of the Confederation of Authorized Operators and Transporters of Romania (COTAR).

• “Regarding the RCA policy, I saw that there is a 3-month extension for this so-called ceiling, although it is not a ceiling. But we will also have discussions with the new president of ASF next week.
• I give you another official statement: we have found companies from outside that will come and conclude RCA policies for us, the carriers, at the reference rate, i.e. the one displayed on the ASF website. Not like it happens today. That is, at B0, a 16-ton truck pays 15,000 – 16,000 lei, and the reference rate is 8,700 lei.
• We will conclude protocols with some foreign companies that will give us the reference rate, because that is normal in a European country. We will pay at the reference rate”, said Vasile Ştefănescu.

ASF: RCA prices do not depend on the reference tariff, even less so for insurers in other countries

The proposal launched by the president of COTAR seems difficult to implement, in the opinion of ASF.

• “The reference rate does not represent a market sale price of RCA policies, it is only informative and reflects market developments in previous periods (the last 5 years).
• Insurers have their own pricing policies and therefore the prices set by them do not depend on the reference rates, even less in the case of insurers operating on other markets, for the insured of these companies”, ASF officials told HotNews.ro.

On the other hand, ASF implies that if carriers find insurers to sell RCA at such low prices this would be possible through the “European passport”.

• “Insurers operating on the basis of FOE (Freedom of Establishment) can offer services on the territory of Romania.
• In the case of RCA, the European MTPL Directive imposes the obligation to establish guarantee schemes in all European countries”, ASF officials also stated.

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