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XPRIMM News No. 106 - April 10th, 2008

No. 106, April 10th, 2008
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Focus on the client

The increase of the clients' satisfaction degree should be, at least theoretically speaking, every company's main objective, no matter if it operates on FMCG market, on real-estate or financial services.
That means, according to the specialists that as the clients' demands are increasing, products that were not so long ago saleable, become old, while small and flexible companies, full of creative ideas, have the chance to fight for their market place.
But, observing in the past years the evolution of the insurance market, we notice that, in many cases, the client is missing from the strategies of the profile companies.
The leaders of the insurance companies are looking for solutions for reducing the claims, for increasing the profitability, for developing the portfolio, but are missing the preoccupation for raising the satisfaction level of the final beneficiary of the insurance... The client...
During a conference that recently took place in Bucharest, one of the top Romanian specialists admitted that most of the insurers' lobby actions from the past years turned up to fail, because these put on the first place the profit of the profile companies, without any accent on the client's best interests.
The increased competition on the Romanian insurance market is characterized by the fact that large international groups like ALLIANZ, GENERALI, GROUPAMA and VIENNA Insurance, are fighting for the podium positions... In this direction, the winners will be those who will offer a superior quality of the services... The winners will be those companies that will focus on clients...


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BCR Asigurari de Viata




Interview with Mr. Antonio SOUVANNASOUCK,
Managing Partner,

XPRIMM: What evolution are you waiting for the Romanian insurance intermediation market for this year?
I am certain of the fact that the intermediation degree will grow by at least 25%. I can base my statement upon the continuous growth of the leasing, especially the motor - related, being a known fact that the Top 10 includes many brokers owned by leasing companies and brokers that have as main clients leasing companies.
Furthermore, I can see a sophistication of the clients that started to demand insurance policies that need consultancy on behalf of the brokers.

XPRIMM: Which is that most important problem of the insurance brokerage market so far? Can you come up with a solution for this problem?
The quality of the services offered by the insurance companies and I am referring especially to the companies from the Top 10. In order to protect the profit, these companies have started to offer low quality services. I am referring to the sales process as well as to the claims adjusting process.
This decrease of the quality of the services will transfer itseft to the broker - the interface between the insured and the insurer. The solution for this problem will come in time through the reorientation of the clients towards companies that understand that development has to keep up with the quality of the services.

XPRIMM: How did the relationship broker-insurer evolve in the latest years?
We can tell more and more about the differences of perspective between the two parties: the orientation towards sales of insurance companies and the necessity of diversification of the services on behalf of the brokers. The fight for market share between the important insurance groups: ALLIANZ, VIG, GROUPAMA, GENERALI leads to a strategy change: sacrificing the traditional relations between the insurers and brokers in favor of the quantitative growth. Because of the insurance services' quality decrease, the brokers have to diversify the services, so that they can compensate this decrease.
As a conclusion, the relation broker-insurer has degraded in the last two years.

XPRIMM: What growth of the volume of underwritings do you predict that you will register in 2008? What are the objectives of your company for 2008?
We have budgeted a growth of 40% of the volume of underwritings, which is a little more that the estimation of the growth of the insurance market, because we intend to be better then the average. For 2008, the main objective is finding solutions for supplementing the decrease of the quality of services provided by the insurance companies and the consolidation and expansion of the territorial network.

XPRIMM: Thank you!


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Managing Partner


The largest transaction on the Romanian insurance market
The French financial group GROUPAMA has acquired the insurance company ASIBAN, for the amount of EUR 350 million. Through the contract signed on April 9th, GROUPAMA becomes the sole owner of the Romanian insurer, while the four banks (BCC, BRD, CEC and Banca TRANSILVANIA) giving up their 25% shares each.
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by, 10.04.2008

Brokers' share heads for 30% of the insurance underwritings
"Insurance brokers have mediated EUR 630 million in premiums in 2007, their share heading for 29% of the total underwritings posted by the Romanian market", Aurelia CRISTEA, Member of the Insurance Supervisory Commission (ISC) Council, stated, with the National Insurance Brokers Conference 3rd Edition's occasion.
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by,, 28.03.2008

CREDIT Europe, on the profit line
Insurance company CREDIT Europe obtained profit in less than seven months from the moment it received authorization to perform on the Romanian insurance market.
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by, 7.04.2008

BT Asigurari has a new CEO
The Insurance Supervisory Commission has approved the nomination of Denis ROUSSET as CEO of BT Asigurari, a Romanian company recently acquired by GROUPAMA.
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by, 7.04.2008

Romanian insurers head towards EU
Six Romanian insurers intend to extend their activity in other European Union member states. Following the model of notification of the supervisory authorities in these states, AIG Life Romania, AIG Romania, ASITO Kapital, CITY Insurance, EUROINS and OMNIASIG shown interest in operating outside Romania.
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by, 02.04.2008

AEGON aims Romanian life insurance market
After the success reported by AEGON in Central and Eastern Europe, the Dutch pension and insurance company intends to launch a life insurance company in Romania, headquartered at Cluj-Napoca, and it has already begun recruitments.
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by, 04.04.2008

28% growth for GENERALI
Insurance company GENERALI posted gross written premium of RON 382 million in 2007, up 28% compared to 2006. This growth was driven both by general insurance, with GWP of RON 321 million (rising 25% from 2006) and life insurance where the company underwrote RON 60.8 million, 49% more than in the previous year.
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by, 02.04.2008

Growth of over 24% for AON Romania
AON Romania insurance brokerage company has intermediated in 2007 a volume of underwritings of EUR 27.73 million (RON 92.56 million), which represents a growth of 24.48% in RON in comparison with the same period of the last year.
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by, 04.04.2008

The evolution of ASITRANS-EUROINS based on the franchise
ASITRANS-EUROINS has become a member of the Romanian Franchise Association, a non-profit organization with the purpose of promoting the Romanian franchise system.
This system, which is also the new approach of ASITRANS-EUROINS in the direction of expansion, allows the use of the brand name and the resources of ASITRANS-EUROINS, the franchisor having the obligation of supporting a first investment of approximately EUR 5,000 and the expenses belonging to the unit.
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by, 03.04.2008

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GENERALI is looking for a new acquisition in Russia
Assicurazioni GENERALI, one of the leading insurance player on the European insurance market, could discuss at the next executive committee meeting on April 11th how negotiations are going to take over Russian life and property insurer MAKS, according to Russian newspaper VEDOMOSTI.
The price of the insurer should be of approximately EUR 500 - 600 million and GENERALI's CEO, Sergio BALBINOT, could use the April 11th meeting to give full disclosure on the dossier.
At the same time, the transaction can be carried out through purchase of company TEHATOMPROM, which owns a stake in the Russian insurer.
"Neither MAKS, nor GENERALI did not address to Federal Insurance Supervisory Service (FSSN) to obtain the sanction for the transaction", the head of FSSN Ilya LOMAKIN-RUMYANTEV has declared. Also, there is no such petition addressed to the Federal Antimonopoly Service (FAS). But it is known that FAS has already allowed CZI Holdings, controlled by GENERALI, to buy 100% of TEHATOMPROM's shares.
For Italian GENERALI negotiations about purchase of MAKS will appear the second attempt of an output on the Russian market. The first attempt through CZECH Insurance Company PPF which supervises GENERALI has appeared unsuccessful. The transaction on purchase PPF for GENERALI of a 38.5% stake in INGOSSTRAKH, one of the leaders of the Russian insurance market, now is challenged by the Russian insurer in court. Right at the beginning of disputes, GENERALI has refused to recognize itself final beneficiary in this transaction.
MAKS has EUR 40.5 million in authorized capital. In 2007 company generated EUR 232.3 million in premiums and paid EUR 86.41 million in claims.
by, 02.04.2008

TRIGLAV enters the Ukrainian market
The Slovenian insurance group TRIGLAV announced its intention to acquire or to establish an insurance company in Ukraine, according to KOMMERSANT Ukraine newspaper.
A final decision regarding this subject was not taken yet, thus the development strategy of the group involves an investment in Ukraine.
According to anterior statements, the Slovenian insurer has an active investment policy for expanding on the European markets and announced last year its intention to penetrate the Ukrainian market in 2008-2009.
TRIGLAV is the third biggest insurer in the Central Europe interested in the Ukrainian market which already has PZU (Poland) and Ceska POJISTOVNA (Czech Republic). Also, another company from Poland, WARTA, is interested in the Ukrainian insurance market.
TRIGLAV is the leader of the Slovenian market, with almost 43% market share. In 2007, the insurer registered an amount of gross written premiums of EUR 707.6 million, increasing by 7% in comparison to 2006. Also, last year, TRIGLAV paid claims of EUR 367.6 million, 7% more compared to the previous year.
by, 08.04.2008

USD 514 million for reinsurance in Kazakhstan
In 2007 premiums ceded in reinsurance by Kazakh companies totaled USD 514 million, up 35% in comparison to 2006, according to RP Newsline.
At the same time, inwards reinsurance premiums amounted to USD 126.1 million, rising up by 126%.
Kazakh insurers generated USD 1.228 billion in premiums (of which premiums ceded accounted for 41.9%) and paid USD 409.8 million in claims. The five largest insurers from Kazakhstan accounted for 51.6% of total market premiums and 80.2% of total claims settled.
Premiums ceded to non-residents reached an amount of USD 411.3 million, up 27% compared to the previous year and accounted 80% of total premiums ceded. Premiums ceded to residents increased by 82.7%, representing USD 102.7 million, accounting for the other 20% of total ceded premiums.
Also, property premiums accounted for 94.3% of total premiums ceded, compulsory lines for 4.2% and liability for 1.5%.
Inwards reinsurance premiums assumed from non-residents amounted to USD 25.3 million (or 20.1% of the total figure), a 475% jump compared to the previous year. Premiums assumed from residents totaled USD 100.8 million (79.9% of total inwards reinsurance premiums), up 96.1% from 2006.
by, 04.04.2008

Moscow International Reinsurance Congress
Although the Russian reinsurance market is not so big, abou7 USD 2.5 billion in 2007, its significant potential attracts the most important companies from Europe.
In this context, on March 25-26, the Moscow International Reinsurance Congress, organized by RUSSIAN Polis Information Group, took place in the Moscow area.
Media XPRIMM, Media Partner of the event, was represented in Moscow by Oleg DORONCEANU, Russia&CIS Responsible, and Irina GALASANU, Consultant, Russia&CIS Margents Markets.
Among the participants of the Congress, were representatives of national supervisory authorities; top managers and senior specialists in reinsurance; brokerage and insurance companies from 24 countries, including the CIS and CEE states, Belgium, Germany, Great Britain, India, Pakistan, Greece, Turkey etc.
On the first day of the conference, the attendees discussed the principles and mechanisms of the regulation and development of reinsurance operations around the world, as well as collaboration between national markets and the world reinsurance industry. Thus, the principle themes of speeches made by Alberto CORINTI, Director for economics and finance of the European Insurance Committee (Comite Europeen des Assurances, CEA), and Rob CURTIS, Chairman of the Solvency & Actuarial Issues Subcommittee of the International Association of Insurance Supervisors (IAIS), were new solvency standards - Solvency II, which are due to come into force in 2012. This topic was continued and expanded by Robert MEINDL, Head of Reinsurance Supervision at the German Financial Regulator (BaFin), who told about the cooperation between European regulators and current trends in the area of mutual recognition in the international reinsurance industry.
Vadim DEMCHENKO, Editor-in-chief at Russian Polis Information Group, acquainted the audience with possible development scenarios and trends in the Russian reinsurance industry.
The agenda for the second day of the Congress was the extension of cooperation between national markets. Notably, the majority of speeches were not forecast-oriented but had a practical character. Speakers touched upon such vital issues as capacities, competition and safety in the reinsurance area, and focused more attention on peculiarities and problems of writing reinsurance in concrete markets.
by, 27.03.2007

TRIGLAV increased profit by 102% in 2007
Slovenian Zavarovalnica TRIGLAV and one of the leading insurers in central Europe increased net profit by 102% and pointed EUR 43 million in 2007, prompting Chairman Andrej KOCIC to assess the company's operations as successful. TRIGLAV has written EUR 708.3 million in gross premiums and paid out EUR 367.6 million in damages, according to Slovene Press Agency reports.
The market share of Slovenia's largest insurer reached 42.9% in Slovenia in 2007, exceeding the goal by 0.1%, while the return on capital coefficient stood at 10.1, marginally better than the planned ten-fold return on capital.
The company's key strategic goals remain the same as last year - maintaining the market share and increasing its sales. The company may also increase its share capital and get listed on the stock exchange, KOCIC added.
The shareholders are to debate the 25% capital increase over the next five years and the listing at the annual general meeting on 18 April, he explained.
KOCIC said that TRIGLAV is ready to get listed and should be listed in order to boost the transparency of its operations. The chairman believes that the company has outgrown the Slovenian market and will therefore focus on expansion in SE and Eastern Europe.
"One of the priorities regarding new markets is Albania", he said. Asked about the possibility of a tie-up with NLB, Slovenia's largest bank, KOCIC said that TRIGALV would like to enter into a partnership with a large bank, and NLB is also a good possible partner because its strategy is focused on SE Europe.
TRIGLAV has recently set up a pension fund in Serbia and a new subsidiary in Slovakia, being among the leaders on the insurance markets of Croatia, Bosnia and Herzegovina, Montenegro, Macedonia, Czech Republic and Slovakia.
Also, the company's president pointed that the group aims in 2008 an increase of EUR 1 billion in premiums.
by, 04.04.2008

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ERSTE Bank: Romania to be a likely stock market revival winner
ERSTE Bank analysts estimate that capital markets will remain volatile in the short-run and will be dominated by deals to secure profit. However, in case of a stock market revival in Central and Eastern Europe (CEE), Romania could be the first country to benefit from such a trend, according to ERSTE's latest report.
"We are still cautious in Southeastern Europe, but we think Romania will be the first to benefit from a wider revival trend, once investors are willing to approach smaller markets again", according to Henning ESSKUCHEN, Research Manager for CEE capital markets within ERSTE Bank.
by, 11.04.2008

BCR: Economic growth could exceed 7%
Romania's economic growth could exceed 7 percent in 2008, in an optimistic scenario, according to estimates made by the country's largest lender, Romanian Commercial Bank (BCR).
The scenario is based on at least average agricultural production this year and faster growth in the construction and industrial segments.
In a basic scenario, with growth levels close to the ones registered last year, economic growth could amount to 6.1 percent this year and 6 percent in 2009, below the levels forecast by the National Prognosis Commission (CNP), of 6.5 percent in 2008 and 6.1 percent in 2009.
The current account deficit is to be 15 percent of gross domestic product (GDP), both in 2008 and 2009. The budget deficit is expected to amount to 2.7 percent of GDP this year and to idle in 2009.
As far as foreign direct investments are concerned, their ratio in GDP is expected to drop to 5.4 percent in 2008 and to 4.6 percent in 2009, compared to 5.6 percent in 2007, BCR analysts say.
by, 10.04.2008

Exchange rate to amount to RON 3.65-3.7/EUR 1 for Easter
Economic analysts are expecting the national currency to appreciate by the end of April, up to RON 3.65/EUR 1, due to higher remittances from Romanians working abroad and improved international circumstances.
"We will have a stronger leu at Easter (Ed. n. Orthodox Easter is on April 27)", Romanian Commercial Bank's (BCR) Chief Economist, Lucian ANGHEL, told Business Standard.
Furthermore, the positive regional sentiment has led the leu exchange rate to its lowest level in the past five weeks, with a Monday quotation set by the National Bank of Romania (BNR) at RON 3.6949/EUR 1.
In April, Romanians working abroad are expected to send home about EUR 1 billion. "I doubt that worker remittances will lead to a significant appreciation of the exchange rate in current international circumstances", said RAIFFEISEN Bank Romania's Chief Analyst, Ionut DUMITRU, who estimates that the exchange rate will remain at some RON 3.7/EUR 1 for the coming 3-4 months.
BCR is expecting that the national currency will appreciate against the euro this year, with an average exchange rate at RON 3.6/EUR 1 in 2008, compared to RON 3.33/EUR 1 in 2007.
by, 9.04.2008

Romania has third share in regional value of real-estate transactions
Last year Romania has ranked third in Central and Eastern Europe (excluding Russia) when it comes to the value of real-estate transactions, with a total of EUR 2.2 billion (approximately 20% of the regional volume), according to a report authored by the Jones Lang LaSalle company, Mediafax informs. Romania was surpassed by Poland and the Czech Republic. "Romania has been the star of the region this year (2007 - editor's note), with an investment hike of 144%, the investments reaching a total volume of EUR 2.2 billion", the report reads. In Romania, close to half of the transactions have consisted of retail segment properties, 34% of office spaces, 8% of hotel spaces and 8 per cent of industrial spaces. "Romania is starting to increasingly meet the acquisition criteria of investment funds that are active in Central and Eastern Europe", the study goes on to say.
The LaSalle analysts point out that the banks have started to favor transactions that surpass EUR 100 million. "Investors that do not benefit from strong relations with the banks have a hard time obtaining the financing, with several investor groups being left outside the real-estate market for this reason, at least until an improvement in financing conditions is registered", the authors of the study state.
In what concerns the output, its downfall has stopped in the last quarter of last year, with investor expectations for 2008 pointing out to a growth from a level below 6% to a level of 6% to 6.25%. "At this level Bucharest maintains a 35 to 65 percentage point difference compared to Prague and Warsaw", the study shows. At Central and Eastern European level, the lack of liquidity has significantly reduced the number of investors interested in buying real-estate products in the first quarter of 2008.
For the first half of the year, the LaSalle analysts estimate a smaller level of regional real-estate transactions compared to last year, on the backdrop of the investors' reserved attitude towards the decisions to sell or buy.
by, 8.04.2008

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FIAR - International Insurance-Reinsurance Forum
May 19-23, 2008
Sinaia, Romania
Organizer: Media XPRIMM

The Fourth International Risk Management Conference
April 17-18, 2008
Almaty, Kazahstan
Organizer: EURASIA Insurance Company
Media Partner: PRIMM Insurance&Pensions Magazine

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XPRIMM Newsletters


General Director: Sergiu COSTACHE Executive Director: Adriana PANCIU
Business Development Director: Alexandru D. CIUNCAN

Editor in Chief: Mihaela CIRCU
Scientific Advisor: Daniela GHETU
Assistant: Lidia POP

Accounts Manager: Georgiana OPREA
IT Department: Octavian GRIGOR, Dorin PALADE

Edition Responsible: Mihaela CIRCU


Reproduction or use without permission of editorial or graphic content, in any manner, is prohibited. The Editorial Staff is not responsible for the truthfulness or the accuracy of the presented data. The Editorial Staff has the right to present the data in it's own manner. In what concerns the use, in any manner, of the information contained in this e-mail, Romanian laws apply.

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