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December 4, 2020

VAT hike would raise insurers’ costs and bonus prices

A possible VAT hike would raise insurers’ costs, and insurers would resort to increasing bonus prices in order to lower the negative impact of higher costs, Radu Mustatea, general manager Astra, stated during a seminar, Mediafax informs. He said 2010 will be a difficult year for the insurance industry, a year that “had a difficult start and will continue in the same manner until December.” Astra’s general manager added that the announced austerity measures will indirectly affect the insurance industry. He pointed out that the evolution of subscriptions on the car insurance segment will influence the insurance market’s results this year too.

In 2009, CASCO and RCA subscriptions represented 77 per cent of the volume of subscriptions on the general insurance segment. The general insurance and life insurance market dropped by an overall 1.1 per cent to RON 8.84 bln last year. According to provisional data offered by the Insurance Supervisory Commission (CSA), in Q1 of this year, general insurance and life insurance subscriptions dropped by 5.29 per cent to RON 2.29 bln, against the backdrop of lower revenues from general insurances, the latter reporting a 7.62 per cent drop. In Q1 the general insurance segment reported a volume of subscribed bonuses of RON 1.874 bln, down by 7.62 per cent compared to the same period last year.

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