Allianz-Tiriac: RCA fees are 30% undervalued

Average fees operated on the market for RCA (auto liability insurance) are “at least 30% lower than they should be,” believes Cristian Constantinescu, general manager of Allianz-Tiriac Asigurari (Allianz-Tiriac Insurance). He says the RCA fees operated by a large part of the companies on the market are set from the very start at levels, which can result in significant losses for the companies. In other words, we are talking about dumping fees, since prices are lower than the actual costs (which include operating expenditures, claims settled and potentially, a profit margin). This situation has been going on for several years on the market, according to Constantinescu. For instance, the average RCA fee operated on the market for a Dacia Logan (for an individual who insures their car for the whole of 2008) is around 80 euros. Taking into account data from the head of Allianz-Tiriac, the average fee for the whole market amounts to at least 104 euros. “Lately, I’ve become increasingly pessimistic. I thought the situation would last for a year, two or three, but it’s already been five years. Big name companies have entered this game, and don’t seem to mind the massive losses at all. I just don’t get it any more,” said the head of Allianz-Tiriac Asigurari.