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XPRIMM News No. 112 - July 17th, 2008

No. 112, July 17th, 2008
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We have a crisis... How to deal with it?

We are during full human resources crises...

According to a recent study, in Romania over 73% of the companies said that they do not find qualified labor force for the free positions.

The insurance market faces the same "cruel" reality...

The HR Managers from this industry pay attention to the fact that the number of young people that intend to develop a carrier in insurance is constantly decreasing, and the ones who still decide to enter in this domains are quite under qualified.
The effects are felt especially in the rest of the country, according to the conclusions from the visits made by the teams of the Romanian national coverage program.

Although we do not want to debate regarding the quality of the Romanian educational system or the reasons that push young people to unqualified work abroad, we have to say that the labor market is based on the laws of demand and offer. And if on top management level the insurance companies seem to know the music, in what concerns the human resources, in the lower levels there is still much to do on the lyrics.

So, although the insurance companies are declaiming substantial training budgets, the discussions with young people that initially have chosen a carrier in this field shows a mentality as "the job has to be stolen, stay here and learn"...

Are the wages from insurance big enough to motivate the young generations? The employee benefits are satisfying? Are there enough carrier opportunities? Are the training activities useful and efficient? Here are some questions for you to reflect over summer...

And the two generations of young people that are graduating the college these days may represent the answer to the above questions and the solution for the human resources crises...


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BCR Asigurari de Viata




Interview with Mr. Ilie CARABULEA
CARPATICA Financial Group

XPRIMM: Most of the times the press refers to you as "the most powerful businessman in Sibiu". What does that mean in your opinion?
The power and strength of a businessman resides in his achievements, in his responsibilities assumed and fulfilled and in the message that his results and successes give to society. If a businessman is perceived by people as being strong, then the feedback is a positive one and this kind of appreciation comes to enforce the existence of the system of principles, values and rules of conduct that is briefly known ass business ethics.
According to those mentioned above, for me, being a powerful businessman means that a set a essential rules are respected by the entire group (approximately 30 companies), rules that also are found in my managerial philosophy:
- the will to always improve and perfect;
- the continuous fight to achieve better results;
- managing activities and providing services, not only on a local level, but on a national and international one;
- the contribution to the wellbeing;
- respect and loyalty towards the company and harmonization of the interpersonal relationships throughout the holding;
- the assumption of the managerial responsibility.

XPRIMM: In just a few years you managed to create a very notorious and stable financial group. Which are the plans to further develop this business?
I believe in a continuous stability and development, having in mind the necessity to supervise, consolidate and expand any business that you establish. That is what happened with CARPATICA Financial Group. CARPATICA Asig was created in 1996 (at the time it was called ATLASSIB Asigurari). The establishment of CARPATICA Commercial Bank followed closely in 1999, while SSIF CARPATICA Invest, CARPATICA Construct and CARPATICA Life Insurance Broker were created in 2007. We now find ourselves at the moment when we have to consolidate the existing structures, to expand and to identify the business opportunities that come along the way, without losing sight of our primary development objectives.

XPRIMM: The CARPATICA Financial Group is one of the few ones with Romanian capital. Do you intend to maintain this situation or will you search for a foreign investor to finance the group's plans to expand?
We take pride in the fact that the group was built mainly with Romanian capital. We have proven the strength, the power and the presence of the inland capital. As a matter of fact, the slogan of CARPATICA Commercial Bank is "the strength and intelligence of Romanian capital". All the investments we've made so far were financed with inland funds.
As for foreign investors, we don't have to look for them. Representative names from the European financial markets are getting more and more interested in our activity. Although we had some offers to sell parts of our portfolio and to establish strategic partnerships, we have not taken a decision at this time. Meanwhile, we are open to new proposals and negotiations.

XPRIMM: CARPATICA Asig is the only one in the top 15 insurance companies which has 100 % Romanian capital. What is the role of CARPATICA Asig in the group?
As I said before, we are proud to be in the top 15 insurance companies in Romania, using only inland funding. This is a proof that Romania has valuable resources for investments, that we benefit from a healthy business environment and that we have businessmen eager to invest in truly prosperous enterprises.

XPRIMM: Which are the development strategies for CARPATICA Asig? Do you have any offers from a foreign company? Is CARPATICA Asig for sale?
The development strategy for CARPATICA Asig focuses on the two main components: consolidation and growth. We have ambitious plans: to expand, to gain a larger share of the market and to increase the number of our customers. We are aware that all of the above can only be achieved with a high level of investments. The first step we've made in 2008 was the increase of the company's share capital, by the will of the shareholders, reaching at the moment RON 20,800,000. The funds are still entirely Romanian.
We had some interesting purchasing offers from foreign companies, which I believe is a sign of appreciation. We have not taken any decisions in those directions but we are open for further proposals and negotiations.

XPRIMM: CARPATICA Commercial Bank is aiming for a profit thet is five times bigger than the one in 2007. What can you tell us about the targets of CARPATICA Asig?
For the moment, the increasing claims ratio on the MTPL segment is affecting the profit of the company. To make it more profitable, we designed new offers that include insurance of property and goods, which have a lower degree of risk. We believe that, through this method, the budget will grow between 19% and 35%.

XPRIMM: Insurance, banking, investment funds, real estate... this is the present. Which are the sectors you will approach in the future?
You already mentioned the main points of interest in Romania in the near future. I would add others that I consider interesting and which are related to my favorite business: tourism and transportation. The expansion of the national and international road transportation, air transportation, tourism and agrotourism, without forgetting agriculture, are just some of the fields in which we are developing new projects.

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CARPATICA Financial Group


10 years and a long road ahead!
On the 10th of July, 10 years ago, Media XPRIMM was officially founded. Since then, the company has permanently extended its activities and has managed to earn an unique place on the insurance and private pensions market, being considered the most important communicational vector of these industries in Romania.
Click here to read more!
by, 10.07.2008

The ASIBAN sale, finalized in T3/2008
The finalization of the ASIBAN sale to GROUPAMA represents for TRANSILVANIA Bank one of the main objectives for the next 6 months. The operation will be done in the third trimester of this year.
Click here to read more!
by, 11.07.2008

Over RON 45 million in the first quarter mediated by brokers in the property insurance segment
According to the forecasts of Insurance PROFILE Review, RON 45.92 million (EUR 12.45 million) is the sum of the gross premiums mediated by brokers in the property insurance segment (fire and disaster, property damage, agricultural insurance), between January and March of this year.
Click here to read more!
by, 07.07.2008

ING paid the EUR 380,000 fee for outsourcing asset management of pension funds
ING Life Insurance and INF Pensions yesterday paid the EUR 380,000 worth fee for outsourcing the asset management activity for the 3 pension funds they manage (two voluntary and one mandatory), ING representatives told
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by, 17.07.2008

First season of transfers between mandatory pension funds begins in two weeks
First season of transfers between mandatory pension funds (2nd pillar) begins in two weeks - on the 1st of August, CNPAS will process the first round of transfer requests.
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by, 17.07.2008

2008: Historical losses for the insurance market
The insurance market will record losses in 2008, as well. The statement belongs to Denis ROUSSET, General Manager, BT Asigurari, who estimates that the negative results will reach "historical values" this year.
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by, 11.07.2008

INTERAMERICAN will increase its shared capital
INTERAMERICAN insurance company will increase its shared capital with RON 34.47 million. This way, the capitalization of the company will exceed RON 100 million, as this operation will be done in cash.
Click here to read more!
by, 9.07.2008

Bancassurance - a solution for life insurance?
The need to diversify banking services, a key factor in a field that is strongly influenced by the growing needs of customers and by a substantial offer of similar products, sheds more light on partnerships between banks and life insurance companies, with real chances to increase both of their revenues.
Click here to read more!
by, 09.07.2008

EUROINS grows by almost 50%
In the first months of 2008, EUROINS subscribed over RON 68 million in premiums, according to company officials. The growth in the national currency exceeded 46%, compared to the same period of last year.
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by, 09.07.2008

The acquisition of UNITA takes UNIQA a 20% share of the market in the region
The acquisition of UNITA, as well as its participation to the capital of ASTRA, will help UNIQA reach a market share of 20% in Eastern and Central Europe, according to a survey conducted by ERSTE Bank on the insurance market.
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by, 14.07.2008

SRBA, part of WELL FARGO Global Broker Network
WELLS FARGO Insurance Services, a subsidiary of WELLS FARGO & Company (NYSE: WFC), recently announced that it has become the exclusive manager of the HLA Global Network, which has been reintroduced to the international community as the WELL FARGO Global Broker Network.
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by, 16.07.2008

INTERAMERICAN enters voluntary pensions market
INTERAMERICAN Pensions announced filing for a voluntary pensions management license, in order to get two funds authorized and thus enter the Romanian 3rd pillar market. The pension funds will be EUREKO CONFORT (medium risk profile) and EUREKO ACTIV (high risk profile).
Click here to read more!
by, 16.07.2008

OANCEA: Voluntary pension funds will manage net assets of EUR 25 million by year-end
Voluntary pension funds (3rd pillar) will have assets under management of about EUR 25 million by the end of 2008, Mircea OANCEA, president of CSSPP (the Romanian pensions regulator), said recently to
Click here to read more!
by, 17.07.2008

Continuous opt-in for mandatory pensions: 3,000 new participants joined during June
Only 3,000 participants signed for a mandatory pension during June, CNPAS announced, that being only half of the total number of registered adhesions (6,000). Continuous opt-in is mandatory for new entries in the labour market (under 35) and optional for 25-45 year olds that haven't yet opted in. This is the second validation round for the continuous opt-in procedure.
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by, 17.07.2008

GENERALI: The pension business in Romania is second most important to us in CEE
The private pensions business in Romania is the second most important for GENERALI's interests in the Central and Eastern Europe region, judging by the number of mandatory pension funds' participants (2nd pillar) in each country, Werner MOERTEL, former responsible for CEE of GENERALI Holding Viena, told
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by, 17.07.2008

NBR: Pension funds will change Romanian's financial landscape
The private pension funds will change the financial landscape of Romania and will accelerate the stock market development, as well as the bonds market's growth, state the National Bank of Romania experts, in the Financial Stability Report (2008 Edition). According to NBR, the private pensions markets' growth will be "substantial" in the following years, while the pension funds will massively invest in state bonds and on the capital market.
Click here to read more!
by, 17.07.2008

BUPA to insure expats from Romania
The insurance company BUPA will launch a new type of insurance for those who live and work in the new EU countries, among which are Romania, Bulgaria, the Czech Republic, Slovakia, Hungary, Poland and Slovenia.
Click here to read more!
by, 08.07.2008

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Life Insurance Securitisation, in September in London

Jacob Fleming is proud to announce its Annual "Life Insurance Securitisation" conference, taking place 17th & 18th September in Central London.
This is a unique chance to benchmark as well as network with senior executives from JP Morgan, Societe Generale, Swiss Re, Munich Re, Goldman Sachs International, Barclays Capital and many others.
This executive forum will give you the perfect opportunity to gain information on topics including: how to implement the regulatory requirements of insurance risk transfer; how to apply the different alternatives in mitigating longevity risk; how to structure life securitisation transactions successfully; how to manage and structure life settlements effectively and many more.
Take advantage of this interactive platform - compare your approach with industry peers and better understand the partners' perspectives to foster cooperation!
This executive event, supported by XPRIMM Insurance & Pensions as Media Partner, will gather executives and representatives from insurance, reinsurance & life insurance companies, investment banks and also investors, analysts, brokers and other services' providers.
Click here to read the full brochure outlining confirmed speakers as well as topics to be discussed!
Click here for more details!
by, 17.07.2008

14 Bulgarian insurers fined over price-fixing agreement
The Bulgarian anti-trust watchdog has fined 14 general insurance companies a total of LEVS 2.45 million (EUR 1.25 million) for entering into a price-fixing cartel agreement.
The Commission for the Protection of Competition said the memorandum signed by the fined companies in December 2007 sought to establish an industry-wide minimum premium on motor third party coverage as well as a cap on the commissions payable to insurance brokers.
The fines range from LEVS 100,000 to 250,000 (EUR 51,000 to 127,000) from company to company.
Most of the fined insurers that agreed to comment for DNEVNIK said they will appeal the sanction.
Some of the insurers said the fine may lead to an increase in the motor third party premium to LEVS 500 (EUR 260).
The only insurers that passed on the memorandum were DZI General Insurance and UNIQA. Orlin PENEV, Chairman of the Association of Bulgarian Insurers, said the memorandum aimed to establish a uniform policy that would have strengthened the market and set no minimum prices.
by Dnevnik, 17.07.2008

EUREKO to Acquire Russian Insurer ORANTA
Netherlands-based EUREKO plans to acquire Russian insurance company ORANTA in order to enter the Russian insurance market, news source reported July 14.
According to the source which cites a working schedule of EUREKO representatives, the company will sign an agreement this week in Moscow for the acquisition of ORANTA. According to Pavel SAMIEV, analyst of Russian rating agency Expert Ra, the value of the deal may total USD 270-280 million, the source notes.
ORANTA Insurance, established in 1995, has authorized capital totaling EUR 27 million and 50 branch offices and agencies operating in Russia's major cities. PROMSVYAZKAPITAL group, a direct investment fund holding assets in various sectors of Russia's economy, is the majority shareholder in ORANTA. According to Federal Service for Insurance Supervision, from January-March 2008 the company wrote EUR 25.47 million in premiums and paid EUR 13.17 million in claims.
Netherlands-based ACHMEA controls a 51.7% stake in EUREKO while 37.82% of the company's shares belong to RABOBANK. Headquartered in Zeist (Netherlands), EUREKO is represented in 12 European countries. The group includes ACHMEA (Netherlands), AVERO Belgium (Belgium), Friends First (Ireland), INTERAMERICAN (Greece, Bulgaria and Romania), IMPERO France (France), INTERLIFE (Cyprus), UNION (Slovakia) and EUREKO Sigorta (Turkey). EUREKO also controls 33% minus one share in Poland's largest insurer PZU. The group's premiums in 2007 reached EUR14.85 billion while claims paid amounted to EUR12.31 billion.
by RP Newsline, 14.07.2008

S&P Revised Its Outlook on PZU's Core Entities from Negative to Stable
STANDARD&POOR's announced on July 10 that it revised its outlook on non-life insurer PZU and life insurer PZU Zycie, core entities of Poland-based composite insurance group PZU, to stable from negative. At the same time, the 'A-' long-term counterparty credit and insurer financial strength ratings were affirmed.
The ratings are supported by the group's strong competitive position, very strong operating performance, and strong capitalization. These are offset by the execution risk associated with implementing the modernization and restructuring program initiated in 2005 and PZU's limited ability to invest in assets of appropriate duration or stronger credit quality for the life insurance liabilities.
"We consider that the risk of major shareholder intervention in the running of PZU's operations has fallen," Charis ADU-KWAP, Credit Analyst, said.
"The Polish government is PZU's largest shareholder, and it is placing an increasing emphasis on market-oriented reform. It has also adopted a more-cooperative tone in the ongoing negotiations to resolve the ownership dispute with EUREKO".
by, 13.07.2008

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VOLKSBANK plans to surpass RAIFFEISEN in 2009
VOLKSBANK, fourth-largest bank in Romania in terms of assets, has posted assets worth EUR 4.5 billion in the first half of 2008, and plans to surpass RAIFFEISEN Bank, which currently ranks third.
VOLKSBANK President, Gerald SCHREINER, said the bank is only EUR 200 million behind RAIFFEISEN. VOLKSBANK has increased total assets by EUR 500 million in each quarter of 2008 while RAIFFEISEN's assets have dropped.
by, 15.07.2008

International placements yield profit for BNR
Profit in 2007 by the National Bank of Romania (BNR) is largely due to international placements. The bank posted profit worth EUR 137.67 million, after five years of losses. BNR representatives are expecting a rise in profit due to an infusion of liquidity on the market. Meanwhile, the National Bank of Hungary lost over EUR 70 million in 2007, while the Czech National Bank lost EUR 1.57 million. "BNR operations are expensive when the bank attracts money from the market, but a change is possible in future. BNR prepares to offer liquidity on the market", Adrian VASILESCU, advisor to BNR Governor, Mugur ISARESCU said.
The bank posted operational profit worth EUR 400 million in the first four months of 2007.
by, 11.07.2008

FDI doubled to EUR 4.1 billion in first five months
The Foreign Direct Investments (FDI) have almost doubled in the first five months of this year compared to the level registered in the same period last year, reaching a level of EUR 4.11 billion, with the FDI's coverage of the current account deficit growing significantly from a share of 36 per cent in January-May of 2007 to a share of 63 per cent in the same period this year. Thus the FDI has grown by 92.4 per cent in the first five months of 2008, from a level of EUR 2.13 billion registered in the same period last year, the data published yesterday by the National Bank of Romania (BNR) shows. Capital participations and reinvested profits represent 59 per cent of the total FDI registered in Romania in the January-May 2008 period, while intra-group credits represent the remaining 41 per cent. The credits that the companies localized in Romania contract from the mother companies headquartered abroad have the potential of hiking the current account deficit since they will be returned on the dates of payment. Their share in the FDI in the first five months of 2008 has grown compared to the share they had in the same period last year, back when intra-group credits represented 38.2 per cent. Romania's current account deficit has accelerated its growth rhythm in the first five months of this year, growing by 11.08 per cent to EUR 6.52 billion, especially because of the trade imbalance. In the first five months of this year the trade deficit - the main source that fuels the external imbalance - has grown significantly (by EUR 630 million or 9.84 per cent), reaching a level of EUR 7.03 billion.
by, 17.07.2008

Romanian Commercial Bank report: EU fund absorption will increase to 60% this year
Romania's EU funds absorption could exceed 60% this year as compared to 21% in 2007 due to the attractiveness of funding from the European Union, a Romanian Commercial Bank (BCR) report shows. The document shows that private investors and local authorities were attracted towards EU funds. Thus, experts estimate that these funds might generate an "additional economic growth of 15-20%" in 2007-2013.
BCR experts declare that Romania's national currency will be stable if EU funds will continue to be accessed. Among potential negative effects is that in the upcoming years, the Romanian industry might lose its competitiveness due to the accelerated pace to reach the European standards in terms of salary levels.
by, 11.07.2008

Economy Minister Varujan VOSGANIAN: inflation rate to reach 6-7% by the end of the year
Romania Economy Minister Varujan VOSGANIAN declared that the inflation rate might reach 6% by the end of the year. Varujan VOSGANIAN added that the ministry forecast 3.8% initially but the inflation rate would almost double, Romanian monitoring agency Rador informs.
VOSGANIAN made the statement shortly after trade unions announced protests in order to obtain an increase of the average minimum salary from 500 Ron to 540 Ron. VOSGANIAN declared that Romania's National Bank states quite clearly that Romania exceeded its inflation target.
Romania's National Bank inflation target for 2008 stood at 3.8% initially and for 2009 was of 3.5%. However, the Bank revised these estimations, and now, for 2008 it reached 6%.
by, 10.07.2008

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8th Yalta International Forum
September 15th-19th, 2008
Yalta, Ukraine
Organizer: The League of Insurance Organizations of Ukraine
Media Partner: PRIMM Magazine - Insurance&Pensions

Life Insurance Securitisation Conference
September 17th-18th, 2008
London, Great Britain
Organizer: JACOB FLEMING Conferences
Media Partner: PRIMM Magazine - Insurance&Pensions

Achieving Excellence in Insurance Sector in Russia and CIS
September 18th-19th, 2008
Moscow, Russia
Organizer: Jacob FLEMING Conferences
Media Partner: PRIMM Magazine - Insurance&Pensions

10th Insurance & Reinsurance Conference Hydra
September 18th-20th, 2008
Spetses, Greece
Organizer: The Hellenic Association of Insurance Companies
Media Partner: PRIMM Magazine - Insurance&Pensions

"Joining Forces to Raise Your Game" - The Future of Bancassurance, Assurbanking & the Affinity Business
September 25th-26th, 2008
Prague, Czech Republic
Organizer: UNIGLOBAL Research
Media Partner: PRIMM Magazine - Insurance&Pensions

The Russian and CIS Reinsurance Forum
October 8th-10th, 2008
Zurich, switzerland
Organizer: C5
Media Partner: PRIMM Magazine - Insurance&Pensions

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XPRIMM Newsletters


President: Sergiu COSTACHE CEO: Adriana PANCIU
Business Development Director: Alexandru D. CIUNCAN

Editor in Chief: Mihaela CIRCU
Scientific Advisor: Daniela GHETU
International Column Coordinator: Andreea IONETE
Private Pensions Coordinator: Mihai BOBOCEA
Senior Editors: Vlad PANCIU, Oleg DORONCEANU
Editors: Vlad BOLDIJAR, Oana NECULA, Mihai CRACEA
Web Responsible: Costi BORODA

General Secretary: Lidia POP

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

Edition Responsible: Costi BORODA


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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