XPRIMM: It seems like we're still in a readjustment period in the insurance industry. Solvency II came into force, two big insurers went bankrupt, and the discussions on MTPL tariffs had repercussions and have now crystalized in and emergency ordinance and another project still under Parliament's review. Was this a difficult period for the market?
Adrian MARIN: After the introduction of Solvency II there should have followed, indeed, a period of readjustment of the local insurance market, where we would have been able to focus only on meeting the requirements set by the new Directive, requirements which aim to consolidate the market and which entail a sustained, long-term effort from the insurers, as well as from the supervision authority.
If not for the unpredictable events which followed, affecting the insurers' image and the consumers' trust in the system, I could have definitely stated that yes, we are in a period of readjustment.
Unfortunately, both the bankruptcies of two insurers, as well as the discussions on MTPL in recent months, which culminated with the adoption, under pressure, of an Emergency Ordinance, left a black mark on an already fragile insurance industry. It will take a significant time to rebuild the lost trust.
XPRIMM: Did the bankruptcies have any impact on the consumers' behaviour?
A.M.: We initially thought we will witness a change in the customer's behavior, in the sense that he will become more selective in his choices and turn to solid, financially sound companies, who can honor their payments, no matter how large.
Unfortunately, recent events in the market, meaning the carriers' strike and their pressuring of state institutions, which culminated with the Emergency Ordinance for MTPL, showed us that the client's tendency to chase the smallest price, with no regard to the insurer's capacity for payment, is continuing.
XPRIMM: Generali was never known as a player with a significant MTPL market share or an aggressive presence on MTPL. On the contrary, it was known as a company with pretty high tariffs. Given the provisions of the new legislation, especially the capping of tariffs, is anything going to change?
A.M.: Our policy of offering our clients quality services at an adequate price remains unchanged. We don't have a significant market share on MTPL, not because we do not want MTPL, but because we have always militated for a profitable business, no matter the line of business, so that we can be present on the market in the long run, and that we are able to honor our promises to the clients. I wish to underline, as I have done multiple times, that we are a commercial company, oriented towards profit.
Regarding the capping of tariffs, it's too soon to estimate its impact on the business. After we will have the entire legal frame and we will apply the imposed measures, and after we will pay the claims, only then will we be able to tell for sure what the effects of this measure are.
XPRIMM: Is it a right time to increase the market share? Not just on MTPL.
A.M.: For those looking to achieve that at all costs, this can be a good time to do so. We, however, remain faithful to our strategy of profitable growth for our businesses in Romania. And yes, if it is possible to increase our market share in these conditions, i.e. without affecting the quality of services offered to our clients, then of ocurse we will also take this aspect into consideration.
XPRIMM: There were voices which suggested that Solvency II was also a factor which led to the increase of tariffs. Was this indeed one of the effects? What other effects did Solvency II have?
A.M.: Solvency II represents a step forward both for the market, as well as for the clients, given that the Directive aims to protect clients through greater transparency, increased standards of solvency for insurers, and an efficient risk management system.
However, one of the greatest challenges for the local market is to find the balance between the increasing Solvency II requirements in terms of capital, regulations and quality, on the one hand, and fair tariffs for clients, on the other hand. The costs generated by the implementation of Solvency II did not impact the insurance premiums of Generali clients.
XPRIMM: Is MTPL the only problem of the local market? Or are there any other issues which must be solved?
A.M.: It's a pretty big problem, indeed, but the greatest challenge in insurance is still the low degree of consumer education regarding protection through insurance. A lot of Romanians think that nothing "bad" will happen to them during their lifetime, and this makes them decide, erroneously, that they do not need insurance. This explains the low penetration of property and household insurance, despite Romania being positioned in a seismically active area: only 20% of housing is insured, a great part of it only through mandatory insurance. At the same time, the number of those who buy life insurance, with or wihout an accumulation or protection component, is still pretty low.
XPRIMM: Is there a comeback of the Casco underwritings taking place? Which are the current particularities of this insurance line?
A.M.: The evolution of the insurance market has remained steadfast in recent years, and we do not foresee spectacular evolutions in the next period because - let's not forget - the national car fleet is old, 60% of it more than 10 years old.
The RABLA program is an extremely beneficial one for the Casco insurance market as well, but unfortunately it doesn't have the force to generate a renewal process of the national car fleet. Generali managed to increase the Casco business, on the same premises of profitability, offering products with a coverage which meets the clients' rigorous requirements, and high quality of post-sale services.
XPRIMM: In the HY results released by Generali you announced an increase in health insurance underwriting. Which were the factors that led to this increase?
A.M.: This is a good evolution and it's owed to the fact that Romanians want quality medical care, in private clinics in Romania, but most of all abroad. Launching MediHelp, which offers medical services in clinics abroad, has boosted our private health insurance segment. An important role is also played by the employee benefits insurance packages, which companies purchase in order to offer medical care to their employees.
XPRIMM: What does Generali's portfolio currently look like, and which are the business segments that you intend to develop more in the future?
A.M.: Our strategy remains unchanged - we want to focus our efforts on the non-motor segment, which ensures our stability, and we want to increase the retail business in our portfolio. However, in a market dominated by motor insurance, as is the case with our local market, where 77% of the non-life business is represented by motor insurance (according to HY2016 data published by ASF), you must also take this segment into account. Generali Romania is growing on motor while carefully monitoring profitability indicators.
XPRIMM: What objectives have you set for the next period?
A.M.: We want to increase the local business at a constant pace, without compromising the profitability of Generali's business. We are known as a solid company, with long-term plans in Romania, and therefore all our efforts are focused on increasing the quality of our services and maintaining our image as a trustworthy insurer, which always honors its promises and keeps registering the smallest number of complaints from its clients.