Business Forum • 26 June, 2024 at 4:28 PM
Most companies in Romania, 7 out of 10 cases, risk severe damages or the closure of the activity, because they are not insured for their specific needs, shows the internal data of the Insurance Brokerage Academy, one of the main centers for education and training of specialists in the field of insurance. Among the most exposed companies by field of activity are those in production, retail, agriculture, construction or HoReCa, and many of these do not have insurance risk management.
"The majority of local companies, multinational companies or SMEs, do not assess the risks they are exposed to, they do not have a business continuity plan in case of major damages. Therefore, interest in an insurance plan customized according to the needs of each organization is still low in Romania. In the event of fires, explosions or floods, a large part of the company's assets can be destroyed up to the entire headquarters or workplace, with the raw material, products, machinery and other assets that cannot be recovered. In Romania, the risk for such major damages is high, and over 70% of the companies we came into contact with did not have an insurance plan customized according to needs and risk exposure. All categories of businesses are in the same situation, but especially companies that have not implemented a business continuity plan. And through insurance policies specific to their activity, they benefit from full compensation and can thus resume or continue their business activity", says consultant Adrian Stancu, founder of the Insurance Brokerage Academy, one of the important educational and training centers in the insurance field.
According to the public data of UNSAR (National Union of Insurance and Reinsurance Companies in Romania), of the total of 800,000 companies that submitted a financial balance sheet, approximately 21% of them (168,000) had a property and goods insurance policy and/or of general civil liability and only 1% also included a business interruption (B.I.) clause.
The most widespread risks that cause damage and, implicitly, effects on the business that can lead to the closure of the activity are: fire, flood, storm, explosion, accidental damage, work accidents, negligence, operating errors, financial losses.
What type of companies are most exposed to major risks
For companies in Romania, the risk categories to which they are exposed can be multiple, depending on the specifics of each organization. By implementing an insurance risk management process, an organization will have a customized insurance program, built on the basis of risk exposures, which can include coverage specific to several types of insurance, from two to 10 or more.
Regardless of size, physical businesses that own production, warehouse or office space are at risk of major damage. According to an analysis carried out in the last three years, according to the type of activity, the most exposed to the risks of fire, explosion, natural calamities or other types of technical risks are companies from fields of activity such as: production, services, HoReCa, agriculture and construction.
"A large part of the existing insurance policies are not based on an assessment of risk exposure, and many companies in Romania do not have a risk management manager, specialized to implement a process to identify the risks to which a business is exposed. Our internal data shows that 9 out of 10 companies currently in our portfolio did not previously have a custom insurance program. Looking from this perspective, the need of the business environment in our country is very great and this forces us to constantly improve ourselves, so that we can protect against partial or total damage as many businesses as possible in Romania", says the consultant Adrian Stancu, Regional Manager – Partner at Campion Broker de Asigurare and Reasigurare SRL and founder of the Insurance Brokerage Academy, one of the important educational and training centers in the field of insurance.
How risks are identified in companies
Every business has a component of standard risks and one of specific risks, generated by several factors, including: the specifics of the industry in which it operates, the size of the business, the age of the business, the competitive market, the supply policy, the outlet market, the geographical location , the culture of the organization.
Given the complexity of an insurance program, it may contain the assumption of financial risks, catastrophic risks, production risks, technical risks, accident risks, professional and product liability risks, non-compliance risks, non-delivery risks, commercial risks And so on Insurance policies established through a risk management plan often have a lower acquisition cost than if the company were to purchase one policy for each risk class.
In many cases, the decision to purchase a certain insurance policy came as a result of a contractual obligation - a line of credit, the purchase of equipment with external financing, access to European funds, a requirement from a commercial contract, etc., the priority being the obligation policy, at the expense of exposure to a number of risks and value for money.
In the last 2-3 years, the level of awareness of the need for insurance among companies in Romania has increased, but there is a need to implement a risk management process in insurance because only in this way will the management of a company have a clear picture of the aggressiveness of the effects the occurrence of a damage.
Moreover, risk exposures can change over time, depending on the dynamics of the business, but also on other direct or indirect factors, changes that should generate a recalibration of the existing insurances.
Founded in 2022, Insurance Brokerage Academy is one of the leading companies providing specialized educational programs in both professional and personal areas. The Insurance Brokerage Academy has the role of training professionals in the field, respecting insurance standards, with the mission of educating the market and contributing to ensuring a business continuity plan in Romania by implementing a risk management plan. With a community of 100 experts formed in the field of insurance, the academy team currently operates in Bucharest, aiming to expand nationally in the coming years.