The Frenchman who has overseen Groupama’s acquisitions and
mergers worth half a billion euros on the Romanian market is
certain insurers charging low rates will operate increases.
Insurers charging very low prices in order to gain market
share and are operating at a loss will drop this strategy over the
next few months, because the market is dwindling and the chances of
making a profit in the future, as their portfolio rises, have gone
away, says Denis Rousset, the Frenchman at the helm of local
operations of Groupama, a financial group that has invested over
half a billion euros to gain the third position on the insurance
market.
“I think dumping practices in insurance (charging lower prices than the market, which generate losses) will end after the first half of the year. What you could afford when the market was growing by 20%, you cannot afford any more. When the market is rising, some insurers resort to dumping and hope to cover these losses from the profit they will make in a few years’ time. Now the shareholders willing to take losses are gone, because they know they won’t recoup them,” Rousset, 44, explains.