New IVASS criteria for direct compensation: what changes for insurance companies

IVASS redefines compensation parameters: Measure 156/2024

The Insurance Supervisory Authority (IVASS) has introduced important changes to the direct compensation system with Measure No. 156/2024. The aim is to ensure greater accuracy in the calculation of economic compensation between insurance companies participating in the CARD convention. This change follows a series of regulatory updates already initiated by Measure No. 18/2014 and subsequently supplemented by Measures No. 43/2016, No. 79/2018 and No. 102/2020. The main changes introduced by Measure 156/2024The new measure makes two major changes to the criteria for calculating compensation:1) exclusion of natural CARD claims from the average cost calculation IVASS found that the management of natural CARD claims has a different efficiency than claims managed on behalf of other companies. Since the costs of these claims are set unilaterally by the company that insures both the responsible party and the injured party, they are difficult to compare with those of other companies. Therefore, excluding them from the average cost calculation allows for a more homogeneous comparison consistent with the goal of containing costs and ensuring fairness among companies;2) calculation of cost dynamics based on national claims The second intervention concerns the way of calculating the cost dynamics of claims with property and vehicle damage. IVASS has decided to use data on claims that occurred throughout the entire country, overcoming the previous division into macro-areas. This approach reduces the impact of any local shocks on costs and provides a more robust and consistent representation of insurance cost trends. In addition, considering that cost trends are assessed over three fiscal years and compared only with data from the same company, IVASS has kept natural CARD claims in the calculation base. Impact on business performance and antifraudThe adjustment of the calculation criteria is not just a technical revision: it has important operational impacts for insurance companies. The new methodology makes it possible to more accurately measure companies' effectiveness in claims handling, rapid settlement, and anti-fraud activities. In fact, the CARD system rewards the most efficient companies and penalizes the least efficient ones, providing incentives for continuous improvement.This reform will help strengthen the competitiveness of the industry while providing greater protection for policyholders by reducing overall costs.