Health Insurance Still Just A Market "With Potential" Until Healthcare Reform

05.15.2011 ZF English

Health insurance has been the segment with the highest growth potential for insurers for many years, but the potential failed to materialize until now, BUSINESS Magazin reports.

Private health insurance has been the stake with the highest growth potential for insurers for many years. No matter how much they have strived to promote them in recent years and no matter how much confidence Romanians still have in the public healthcare system, insurers holding health policies in their portfolio have not managed to penetrate the Romanian market and set up a consolidated base of insured people.
According to the Insurance Supervision Commission (CSA) data, in 2010 the volume of health insurance gross premiums underwritten reached 24.9 million lei (EUR6.1 million), less than 1% in total general insurance.
Moreover, subscribed premiums dropped by 15.04% from 2009.
The explanation is simple: although almost 9 in 10 Romanians say they do not trust the public healthcare system, an equal number state they cannot afford paying for private health insurance, according to a BUSINESS Magazin analysis.
Currently, just 14% of Romanians hold such a product.
In the opinion of Theodor Alexandrescu, general manager of Alico Asigurari Romania, the market of private health insurance will see solid growth only once reform in the health insurance system has been launched.
Besides this reform, economic rebound and the rising purchasing power will be equally strong arguments for Romanians to earmark part of the money they earn every month in this direction.
An alternative to health insurance are subscriptions with private clinics, which make up a much more solid market and which are causing insurers headaches.
One of the reasons why the situation is as such is that the number of life insurers offering health insurance packages is lower than the number of private clinics increasingly developing the subscription system.
Additionally, insurers are complaining they do not have the same fiscal incentives as health subscriptions. There is also a big difference in terms of offered benefits. An informative calculation shows the value of the monthly premium an insured person must pay starts from RON62 and can go beyond RON300 when the coverage degree is high and complex. (EUR1=RON4.106)

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