Omniasig: Claims are out of control

Since some clients are intentionally damaging or setting the cars they bought in leasing on fire to escape the burden of instalments, Omniasig has expanded its investigation department to uncover such fraud cases.

Claims settled for car insurance have soared this year, with one of the reasons being the rising number of owners of cars acquired in leasing who are staging accidents to dodge payment of instalments, says Constantin Toma, CEO of Omniasig, the biggest general insurer. “In the first half we focused on claims, which got out of control. This is characteristic of the entire general insurance market and it can be accounted for by some factors such as the falling RON. At the same time, a rising number of cases of leasing firm defrauding was registered,” Toma told ZF in one of his rare interviews with the press. “We are investigating these cases and we hope we are sending a serious warning to those who want to turn their cars into money at our expense”. Car claims are an older “disease” of the insurance market, as these are on a more rapid growth trend than revenues from these policies. In the case of Omniasig, for instance, gross underwritten premiums for comprehensive insurance climbed by 7% in the first quarter, while settled claims advanced by 89%. “The claims rate registered strong growth in the first quarter, which scared us, but we saw an improvement in April and May,” Toma maintains. For Omniasig, a major goal for this year is cutting car insurance claims by 15%. The company took a first major step: it sealed a partnership with a single provider of car parts, Materom, so that it should no longer acquire them from car servicing facilities. To the same end of reducing claims, Omniasig has embraced an internal bonus-malus system for comprehensive insurance. The insurance market, which has been posting net losses for the past three years, could be saved by a significant cut in the weight of car insurance in companies’ portfolios, considers Constantin Toma. To boost activity efficiency and adjust to the current market conditions, Omniasig this year decided to close 47 of its 270 branches countrywide. Also, the insurer laid off 200 employees, so that it currently has 1,600 staff. Omniasig, controlled by Austria’s Vienna Insurance, in first quarter posted turnover worth 331.5m RON (90m euros), down 0.13% from a year ago.