Alinda Banica Business Consultancy is a Romanian company providing insurance and financial banking services, accounting and tax consultancy, legal advising, insurance consultancy, business intelligence, IT and ERP implementation. Insurer Broker de Asigurare Reasigurare SRL is an insurance broker providing services to various industries, including agriculture.
Alinda Banica – Principal Consultant, Alinda Banica Business Consultancy
Marius Bucur – General Manager, Insurer Broker de Asigurare-Reasigurare, Bucharest, Romania
Mrs Banica, Mr Bucur, can you tell us about your background and how you started your boutique advisory and insurance brokerage firm?
Alinda: Drawing from my extensive experience in insurance, leasing, and banking, my professional journey has predominantly revolved around serving corporate clientele. Collaborating closely with Marius for two decades, we harnessed our combined expertise in the financial realm to establish a highly selective presence within Romania. Recognizing the pivotal role of insurance across various industries, particularly in the agricultural sector, we endeavoured to foster the economic well-being of farmers.
Marius: With a rich 25-year background in the insurance industry, I have gained profound expertise in crafting personalized solutions that cater to the unique insurance requirements of our clients. Our unwavering dedication to innovation has prompted substantial investments in our cutting-edge online platform, effectively digitizing and streamlining most of our operational processes. Our constantly expanding portfolio serves as undeniable evidence of our achievements.
What are the most common risks that farmers in Romania face, and how does your insurance brokerage company help mitigate them?
The risks have increased in the last three years and include, among others: climate change, inflation, rising interest rates, the current geopolitical situation, lack of economic predictability, lack of skilled labour force, and bureaucracy. From an insurance perspective, the small number of insurance companies in the local market determines relatively low capacities to undertake the risks.
Our experience of over 15 years in the agricultural insurance market helps us establish adequate communication with farmers to determine their needs according to the features of their business. In recent years, good communication has become even more crucial.
How do insurance companies in Romania determine the cost of premiums for agriculture insurance policies, and what factors do they consider?
Internal and external factors influence the insurance premium.
Internal factors include damage history, the area where the crops are located, and the crop type. The requested coverage scheme also plays an important role - covered risks, franchises, insured amounts/ha. Another critical aspect that the insurance companies consider while calculating a premium is the measures the farmer takes to reduce the risk - e.g., an anti-hail net for fruit tree plantations.
The external factor of the equation is the cost of reinsurance treaties.
How do you keep informed with the latest changes in the agricultural industry, and how does this knowledge help you with underwriting decisions?
By maintaining permanent contact with our clients, with the insurance companies, participating in industry events, and continuous professional training courses, we try to keep up-to-date with the needs of the farmers in terms of insurance. We believe any decision must be based on a good knowledge of the factual situation.
Can you give an example of a successful claim payout for an agriculture insurance policy and how your company supported the farmer?
We are always available for our clients. We assist the farmer at all stages, from registering the damage claim until the compensation is collected, including the damage inspection or the settlement calculation. If we refer to the previous year, the payments granted due to the drought that Romania faced significantly impacted the farmers' relationship with the insurance industry thanks to our services and modesty left aside. Our dedication is evident if we consider successful claim payouts.
How do you educate farmers about the importance of insurance, and what strategies have effectively increased their awareness and ability to become familiar with the terms and conditions specific to your insurance policies?
For us, it is imperative that the farmer's expectations regarding the insurance products are correct and that they understand the rights and obligations arising from the insurance contract and the impact on their business.
Transparency is a key feature of our offers – all of them include all parameters based on which the farmer decides which product to choose. Also, after receiving the offers for our customers, we draw up hypothetical damage scenarios just so that the farmer understands how the coverage scheme offered will work in case of an event.
What is your long-term forecast for the agriculture insurance market in Romania, and how do you plan to stay competitive and relevant?
The limited number of insurance companies in our country restricts risk coverage. We would like to see more players in the insurance market and, as a result, improved coverage, e.g., qualitative losses.
Available technology, such as drone monitoring, advanced agriculture equipment etc started being adopted; we also hope for an embankment of farmers' perception of the closure of insurance contracts.
We also expect a greater involvement of the authorities in informing, simplifying subsidy procedures and granting access to the available funds.
As far as we are concerned, we are constantly improving our procedures for correctly identifying farmers' needs in terms of insurance. We train our employees and collaborators to act honestly and, above all, to put the farmer's interests first.