PAID Romania, the country’s national pool for disaster insurance, has been considering extending its reinsurance programme as it assesses the sufficiency of its premium and reserve strength in the case of a major natural disaster.
PAID announced its strategic priorities for expansion at a recent reinsurance conference in Bucharest, according to reports.
PAID’s General Manager, Nicoleta Radu-Neascu, said strategic priorities for the firm include; “strengthening even further PAID’s own funds, extending the reinsurance program, continuing diligencies for ammending the mandatory home insurance legislation regarding the introduction of a deductible of the sum insured, maintaining and consolidating the pool’s portfolio. ”
The pool’s portfolio currently covers about 20% of Romanian housing stock, boasting 1.7 million mandatory household insurance policies.
According to RMS estimations an earthquake at a similar strength to the one that hit the country in 1977 could lead to a maximum loss for the PAID portfolio of €775 million, on a national level this could reach up to €6 billion.
Radu-Neascu commented that as the firm assesses its capacity for dealing with a similar large-scale natural disaster; “A lot of effort will be also put in accomplishing and testing the Mass Claims Plan, a plan involving all the insurance market segments, meant to allow the timely and correct settlement of claims in case if a major disaster.”
At the end of last year, PAID’s CAT reserve came to €6.19 million, its net assets reached €18.38 million.
In Solvency II terms, the pool’s funds were at €16.47 million, with a SCR of €13.21 million and a solvency ratio of 1.25.
PAID’s RI capacity has increased 300% since inception (2010), to €800 million, while its own retention went up to €4 million.