Eurohold’s statement on recent evolutions on the Romanian insurance market

With reference to recent affirmations and speculations in the public space, Еurohold Bulgaria AD, owner of Euroins Insurance Group AD (EIG), is announcing that it has recently strengthened the financial position of Euroins Romania, EIG’s subsidiary, which currently has SCR (Solvency Capital Requirement) ratio of 160% and MCR (Minimum Capital Requirement) ratio of 300%.

In 2022, Euroins Romania paid out 160.000 claims for accidents caused in Romania and abroad, worth over 1.6 billion lei.

Euroins Romania has direct payment agreements with over 1,000 repair shops in Romania, to whom the average payment deadline is between 5 and 10 days, much faster than the legal obligation of paying within 30 days. From all court cases related to the insurance company, nearly 80% of them are concentrated in a very small number of car repair shops and their clients and all of them are for repair operations billed at values more than 3 times above the average market prices.

“We express our concern and astonishment at the uncertainty, created in recent weeks through various situations, elements, and speculations in the public space, which have negatively affected not only our Group and our Romanian subsidiary but the entire insurance industry in Romania as well. In a European state regulated by national and European laws, it is regrettable that one of the key players determined to contribute to the stability of the insurance market with such financial indicators, has become a target of speculations because of the shortcomings created by only few people that, through their practices, have affected and continue to affect negatively everyone and above all the citizens. We are confident that the Romanian authorities have the ability to discern and analyze all the actions taken by our company ever since entering the Romanian market in 2007 in order to strengthen and consolidate Euroins,” said Kiril Boshov, Chairman of the Management Board of Eurohold, majority shareholder of Euroins Romania SA through EIG.

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In 2022, Euroins Romania has paid over 300 million lei in taxes and contributions to various authorities and institutions, including near 70 million lei representing financing (special contribution) provided to FGA to cover the damages caused by the bankruptcy of City Insurance.

Euroins Romania has recently signed a new reinsurance agreement with EIG Re EAD, a reinsurer with 20 years’ experience part of EIG Group, which is a common practice for all major insurance groups, some of which are operating on the Romanian market as well. EIG RE is also part of Eurohold Group which has annual revenue of more than 3 billion euro and 2 billion euro in assets. The total value of the reinsured risk transferred to EIG Re is 1.5 billion lei (over 300 million euro).

Regarding the several ongoing audits for the reinsurance activity of Euroins Romania, the European Insurance and Occupational Pensions Authority (EIOPA) is conducting its own audit, while the shareholders (EBRD and Eurohold) nominated one of the world’s largest actuarial companies to do an independent audit of the reinsurance activity.

Eurohold’s management believes that in the current general context, as we all operate on a mature market, it would be a wise option for any insurance company to refrain from increasing prices in the absence of strong rational reasons, in order to protect the Romanian consumers. In this respect, the attitude of some people and media, who trigger artificial debates on the market, have been surprising. In this way, they contribute to increasing insecurity for the consumers on the Romanian market and drive speculating prices of the MTPL policies, which may lead to an economic crisis without real grounds.

In conclusion, the management of Eurohold expresses its respect towards all the Romanian authorities, the regulatory authorities, and the whole market. The management of the holding is concerned about the actions of several experts in the insurance sector and with their competence and professionalism. The management of the Group hopes that such experts, who are trying to destabilize the insurance market in Romania through personal interpretations, shall be liable to the rigors of the law.