The price of the mandatory third-party liability motor insurance will go up by the end of the year, and some companies are speaking about further hikes in mid-2009, a poll has showed.

Insurers declined to name any figures but all said a price increase is necessary to catch up with levels in the European Union and avoid financial trouble.

Bulgarian insurers sell the cheapest third-party policy, but its coverage spans the whole of the EU, according to Roumen Yanchev, executive director of insurer Bulstrad. The higher limits laid down in the Insurance Code will further pressure prices, he said.

Insurer Euroins has said it might raise its prices by 20 per cent in December-January, the market’s busiest period.

“We’ll definitely raise the price to 180-190 leva by January and to 300 leva by the middle of next year," the executive director of insurer Victoria and deputy board chairperson of the insurers’ association Dancho Danchev said.

The proceeds from other types of policies can no longer cover the massive losses from motor insurance, according to Danchev.

BulIns will keep prices intact until nthe end of the year, having raised them by an average 30-35 per cent on October 1.

Konstantin Velev, board member of Generali Bulgaria Holding, said the third-party liability policy had been selling outrageously low in the past years, but now insurers needed bigger reserves to meet EU limits.

Bulstrad said it has opted for more frequent but smaller price rises to pay wages, brokers’ commissions and claims as well as comply with the reserve requirement.

Source: Dnevnik.bg