Unfortunately, Bulgarians Consider MTPL Insurance As Type Of Taxation, Says Mr Eugeni Ignatov
Mr Ignatov, what is your comment on the present MTPL insurance policies prices? Are they adequate to the risk they cover against?
When talking about MTPL insurance we should say that drivers are first interested in the amount of the insurance premium. And this is the criterium the choice of the insurer is based on. In
2007 MTPL insurance is being sold at almost the same prices as in 2006. Here, however, comes the main difference - now the insurance policy cover for road accidents on EU territory. Every insurance
company is monitoring the range of compensations payments and claim on Bulgarian territory as well as on EU territory and then the companies determine the premium amount adequate to the eventual
payments. It is obvious that the average premium should be raised and my personal supposition is that by the end of the year prices will have gone up BGN 180-200.
The Bulgarian roads are already scenes of war and the number of foreigners drivers is increasing, too - by the end of July Bulgaria was visited by 3 million foreigners...
Road accidents are quite frequent in Bulgaria - every year approximately 1 000 perish on the road. Given the demographic crisis, the tendency is really disturbing. Not to mention all those injured
in the road accidents and the material damage suffered.
MTPL insurance and the insurance companies selling it should efficient in this very spot. Namely, the insurer is responsible when a road accident occurs and should cover for all damages and
injuries. And damages are covered by compensation payments, i.e. the premium amount matters.
The insurance premium has to be augmented in view of the great compensation payments amounts the court rules, the more and more numerous accidents on the roads of Bulgaria and in view of the
financial stability of the Bulgarian insurance market.
As I already said the premium amount should be greater since it is to cover for road accident on EU territory. Let me mention that Green Card insurance, which covered for such accidents until the
end of 2006, was sold at the price of BGN 150 and was valid for a 15-day period. Now, MTPL insurance is worth BGN 100 and is valid for a year on Bulgarian and on EU territory. The common practice
in different EU member states shows that every insurer has to determine the sufficient premium amount.
What should the price be in order to be adequate to EU prices?
The premium amount should not correspond to the EU price, but to the portfolio augmentation, the number of
claims, the amount of the compensation payments and the fact that every insurer has to be capable to provide the compensation payments claimed.
What are the attitudes of the insurance companies towards the margin of price?
I find the clients' attitudes more interesting. Unfortunately, Bulgarians MTPL insurance as type of taxation, sometimes the drivers think of it as motor insurance covering for all damages on the
vehicle. An informational campaign needs to give proper information about what MTPL insurance is and what is covers against. And what happens to a driver whose vehicle is not insured and has caused
a road accident.
Is there a change in the price your company is selling MTPL insurance at?
DZI Non-life Insurance and Reinsurance Company determined the premium amount having taken in
consideration all the requirements and has not yet changed the price of the insurance product.
From August 1st 2007 vehicles registered in Bulgaria are not subject to border control in the European Economy Zone. Are there any cases of road accidents on EU territory caused by
Bulgarian vehicles without proper insurance? Do you cover for damages caused by such drivers clients of your company?
There are no accidents on the territory of the European Economy
Zone caused by Bulgarian vehicles with improper insurance. If, however, such a case occurs our company will make the compensation payment in accordance with the Insurance Code.
Mr Ignatov is the head of the Motor Insurance department at DZI Non-life Insurance Company
