Digitization of insurance over the driver’s back

13.09.2024. / 15:58

BANJALUKA – Insurance companies in Republika Srpska have decided to put digitization on the backs of citizens, so that vehicle owners will pay more for vehicle registration in the future.

The Management Board of the Insurance Agency of the Republika Srpska adopted today at a telephone session the amendment of the premium tariff and price list for motor vehicle insurance in the RS, which increased the single basic premium by 1.5 percent.

This comes after the announcement of the digitization of the mandatory insurance sector in the RS, which entails the purchase of software whose maintenance, according to estimates, will cost around one million euros annually. This is exactly what caused a real small war on the RS insurance market.

Namely, the implementation of the digitization process is entrusted by law to the Protection Fund of the RS, and in order to establish that base, the acquisition of software is necessary.

The protection fund is trying to buy software from the Association of Insurers of Serbia and, according to our information, is exerting a lot of pressure to secure a two-thirds majority in the fund’s Assembly, which is made up of all insurance companies in the RS.

Namely, a few days ago, the Executive Board of the RS Chamber of Commerce sent the RS Insurance Agency an Initiative to Change the Premium Tariff and Price List for motor vehicle insurance in the RS, so that the single basic premium is increased by 1.5 percent.

“The executive board welcomes and supports the establishment of a central electronic record in order to improve the insurance market and proposes to increase the motor vehicle insurance premium in order to provide permanent and adequate financing of the activities of the Protection Fund on the establishment and operation of the central electronic record”it is stated in the Initiative.

This initiative, as we learn, caused divisions among businessmen as well.

Regardless, it was adopted today at the meeting of the Management Board of the RS Insurance Agency headed by Goran Račić, otherwise the president of the Regional Chamber of Commerce of Banjaluka.

“The Board of Directors adopted the initiative with the condition that it will be implemented when the digitization process is completed. “Registration per car, if the Protection Fund implements digitization, will increase in price by 1.5 percent, which is about four marks per policy,” said Račić.

Chain price increase of goods and services

Vice President of the Union of Employers of the Republika Srpska Dejan Mijić for CAPITAL says that he supports digitization, but that it should go over the backs of end users.

The increase in the price of vehicle registration, he warns, could cause a chain increase in the price of other goods and services.

“Any price increase will lead to a difficult situation and higher costs for our companies. We welcome digitization, but it should be seen as an investment in your business, especially if it will lead to a more orderly operation of insurance companies. However, whoever invests in his business should also bear those costs, and not let the investment fall on the end consumer, in this case, companies and citizens.”Mijić said.

We remind you that the Protection Fund of the RS needs to implement digitalization in the mandatory insurance sector in the RS and intends to purchase software from the Association of Insurers of Serbia.

However, some insurance companies are against it, stating that the software itself is expensive as well as its maintenance. Their problem is that the software would be taken for ten years, and in case of termination of the contract earlier, the companies would have to pay a penalty in the amount of the price of the two-year lease. The companies complain that a tender for the procurement of software was not announced, they claim that there are similar products on the market that are significantly below the price agreed with Serbia, which, as originally promised, was supposed to be a donation.

CAPITAL: Dejan Tovilović