Member of the Management Board
Zavarovalnica TRIGLAV

XPRIMM: Which do you believe will be the impact of the new European legislation (Solvency II & IDD) on the insurance activity from an insurer's standpoint as well as from the customer's perspective?
I believe that the impact is positive. The objective of Solvency II is to harmonize legislation in the EU, which with an upgraded system of risk management provides greater financial stability of insurance companies and greater security to policyholders. The latter is also contained in the Directive on insurance distribution, which brings an even more comprehensive overview of insurance towards increasing the role of policyholders, i.e. of the customers. It will be important that best insurance practices continue to evolve and, consequently, the trust and partnership between insurers and the insured.

XPRIMM: As the current environment has specific challenges for insurers, do you see any consolidation taking place within the areas you are active in?
It is highly likely that in some markets the insurance sector will have to be further consolidated, since the present structure is too fragmented. As a consequence of the already implemented and the upcoming legislative changes in the medium term, a certain impact can be expected on the ability of the insurance industry as a whole, and especially of some individual players in terms of underwriting. In general, I believe that this could have a greater impact on smaller insurers as they have to comply with relatively higher capital requirements and at the same time - like others - operate in face of currently lower returns on financial investments.

XPRIMM: Do you plan on entering other markets in the CEE / SEE region in the near future?
The insurance markets in the Adria region have potential for growth. In line with our strategic guideline, the TRIGLAV Group will continue to strengthen its position in the region and to develop as the insurance hub of South-East Europe through organic growth, however we do not rule out potential takeovers should an appropriate opportunity arise. We will continue to consolidate our position, and we will act prudently, aimed at long-term increase in the value of the Group. We see special opportunity in the health and pension insurance segments, where important steps were taken recently. Furthermore, we are actively considering the possibilities of digitisation in the broadest sense, including the opportunities to develop innovative business models with which we want to get even closer to customers.

XPRIMM: How have you managed to maintain a leading position in a period when the CEE markets were targeted by the large international groups?
We are aware that we are operating in a highly competitive and demanding environment, in which specificities of individual insurance markets play an important role. In the markets where the Group holds a high market share and a leading position, the consolidation strategy has been and will continue to be pursued, whilst on the remaining markets, where the Group's presence is still being built, focus has been and will be on strengthening the Group's market position. In all markets, we will strive to take full advantage of the competitive advantages of the TRIGLAV Group, such as the rapid and efficient claim payment system, the strength of the TRIGLAV brand, the wide range of products and services while ensuring long-term return on invested assets and increasing productivity through synergistic effects.

XPRIMM: Which is the most dynamic market you are active in and which is the most competitive? Regarding the customers, is price still a defining factor in purchasing insurance?
In the first six months of 2016, premium growth was seen on all the insurance markets outside Slovenia. In Croatia, our biggest market outside Slovenia, the insurance premium of Zavarovalnica TRIGLAV was 12% higher, whilst the highest premium growth of 20% was recorded in the Serbian market. In general, the Serbian insurance market is one of the most perspective in the Adria region. In the last three years, total premium was up almost 44%. The TRIGLAV insurance company headquartered in Belgrade recorded a written premium increase of as much as 88%, which is even substantially above the average growth of the insurance market. The Slovene insurance market is characterised by a high degree of concentration with strong competitors. But as we expected, the need for insurance services in the Adria region is increasing in line with its getting closer to the European Union, and the same time individual markets are growing. We note that the consumer behavior of policyholders has changed, and at the same time, we are witnessing the aggressive competition. We are well aware that in difficult times the price of insurance is important to people and we therefore try to meet them halfway with good products and different offers containing discounts. In my opinion, it is most important to find the right balance between price and quality of services.

XPRIMM: As information is becoming more accessible to customers (Internet, social media etc.) do you see any changes in their behaviour?
Our customers are increasingly using the internet and mobile devices, especially smartphones and tablets. More and more customers search for information and compare offers on internet, which definitely provides an opportunity for development. The development of our services is focused on multi-channel communication and excellent customer experience. Expanding the range of smart and connected products and services has changed our cooperation with customers, because our service is now faster, more user-friendly, etc. The foundation of our insurance business is our proactive marketing approach, increasing the efficiency of the sales network and developing highly competitive products and services specifically tailored to customer needs. It is important to be aware that the insurance financial products are rather complex, requiring more understanding, and due to their complexity can consequently be less suitable for sale via the internet. But certainly not all. However, the current personal contact, advice and assistance in the selection of a particular product remain an important component, like for example, when buying a car.

XPRIMM: Which do you believe it is the insurers' role in increasing the customers' financial education? Do you believe that insurance awareness is an issue within the countries you are active in?
Understanding of insurance services is an important component of financial capability, which enables an individual to make the appropriate choice. When choosing an insurance product, people need to understand the risk faced and the risk-benefit ratio derived from any insurance or general financial product. It is crucial that any individual should be able to formulate their needs, and understand the range of insurance services and consequently choose the insurance that best suits him. The development of the insurance market proves that our typical customer is thinking about how to ensure a safer future for himself and his family.

XPRIMM: Which are your main objectives for the following period?
Our focus lies on core insurance business. Satisfied clients will continue to be our main concern and focus of activities. We will put emphasis on the development of our services, the availability and diversity of sales channels, which are increasingly supported through online operations, and the strengthening of the sales network on all markets of the Group. This is our comparative advantage in Slovenia, and we are transferring this practice also to our markets outside Slovenia. We effectively achieve the set strategic objectives, which is reflected our solid business results. In the long term, I see an opportunity for growth in the health, life and pension insurance.

XPRIMM: How would you comment upon the costs of implementation of the Solvency II Directive?
After a period of careful preparations, which was going on since 2007, we met the requirements and adapted to the changed regulations regarding Solvency II and entered into 2016 with sufficient capital strength also recording to the new requirements. The Company's risk profile is adequately balanced and represents a guarantee for long-term, financially stable and profitable operations. The new European directive has primarily significantly influenced our business culture; from focusing on compliance with the rules, we as insurance professionals are now focused on more active risk management. For the purposes of risk management and reporting, the relevant software was installed for risk monitoring and reporting in compliance with the Solvency II Directive requirements. Setting up a system required investment in new software that actually upgraded our previous efforts. The investment in the form of a variety of resources has been challenging, but we believe it has paid off and will continue to pay off in the future. As I pointed out in the beginning, the new regime encourages even greater financial stability of insurance companies and enhanced safety for all policyholders.

XPRIMM: Thank you!

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