GROUPAMA: profitability remains the main target, but growth is still on the agenda

17 August 2011 —
groupama"One of the most important development projects of GROUPAMA, in the near future, involves launching a direct sales insurance offer in Poland, almost certainly in early 2012", Christian COLLIN, GROUPAMA Chief Financial & Risk Officer, revealed in a recent interview published by EuroBusiness Media. The Polish project comes along with the other measures taken by the French Group in order to sustain business and organic growth, both through distribution networks and online.

In response to the tougher economic and financial environment faced by the insurance industry in the last years, GROUPAMA took very determined steps to improve profitability and halted the external growth policy which. "To improve our technical and operational performance, we've introduced a full range of measures that are still ongoing. In non-life insurance, we've adjusted our rates, while carrying on with our risk selection and portfolio monitoring efforts. Those measures are starting to pay off, as our combined ratio in the first half is down to 99.6%. And our medium-term target is 98%, give or take two points, depending on the insurance cycle", Christian COLLIN explained.

"In life insurance, we've gone further in promoting our health and provident insurance offer, as well as our unit-linked savings products, which require less equity", he added. New unit-linked policies were introduced in such countries as Hungary, Bulgaria, Romania and Greece, and a broader range of high-margin products in protection and loan insurance in countries including CEEC, Italy, Spain and Turkey. "That approach has already improved results, because our margin on new business has risen from 3.7% to 7.2% at 30 June", COLLIN said. Within its CEE network, the French insurer took measures in order to streamline its structure. Thus, while the Bulgarian subsidiary focused its distribution policy towards a bancassurance arrangement with OTP, Bulgaria's second largest bank, the Slovak subsidiary will soon become a branch of the Hungarian GROUPAMA Garancia Biztosito.

Finally, GROUPAMA maintained all its prior programs to control overheads, and even took additional steps to boost profitability at the main subsidiaries. "For example, on 2 August, we disposed of our healthcare arm in the U.K. We are also working to merge GAN Eurocourtage with GROUPAMA Transport to streamline both businesses. Our Portuguese subsidiary is now affiliated with our Spanish subsidiary in non-life insurance, and our business in Slovakia with our Hungarian subsidiary to maximize scale and performance. And our current project for GAN Assurances is to consolidate management locations, both to boost efficiency and to address small and large businesses more effectively", the Groups' representative said.

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