XPRIMM News No. 121, November 20th, 2008

The bone of contention

If for 10 months a year the MTPL policies are being blamed by all the insurance market players, the cold season's arrival brings an exacerbation of the discussions regarding this class.

But this year, the eternal discussions about the premium rates rising were left behind, as the debates are now focused on the correctness of the fact that the brokers' commission assigned when closing MTPL policies is limited at 15%.

The controversial measure appears in the text of a norm issued by the Insurance Supervisory Commission (CSA), published in Romania's Official Gazette.

The brokers representatives' reactions to this measure have shortly appeared, proof of this fact stands also in the large number of commentaries (over 80) posted to the Question of the Week section by the 1asig.ro visitors.

Maybe never more than now, the opportunity of Adam SMITH's "invisible hand" theory has been globally debated... But until new evidence, we are wondering if a free competitive market must not be left bondless in order to find its own motor-adjustment mechanisms...

Therefore, as in every winter beginning, MTPL is, once more, the bone of contention...

by mihaela.circu@mxp.ro

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Interview with
Laurent CHARLIER, General Manager,
GRAS Savoye

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Laurent CHARLIER,
General Manager, GRAS Savoye

FIAR 2009 has been launched
FIAR 2009 - the 12th Edition of the biggest European spring event, has been officially launched.
We have very good news for you: starting from today until November 30th, you can benefit from a 400 EUR discount, if you register.
Click here to read more!
Full details and online registration for FIAR 2009 are available at www.fiar.ro!
For the most recent edition attendance list, please, click here!
For the on-line registration form, please, click here!
by mihaela.circu@mxp.ro, 20.11.2008

Property insurance, mandatory starting with the 1st of July 2009
"We wish to inform the population about the fact that property insurance will be mandatory starting with the 1st of July 2009, according to the present legislation", Radu Mircea POPESCU, Councilor in the Ministry of Interior and Administrative Reform - MIRA -, has stated for XPRIMM Newsletters.
The MIRA official specifies that there will be periodical informing, transmitted in due time, concerning the insurance companies authorized to make this kind of policies. This way, he said, "we try to avoid any abuses or confusions due to implementing this system nationally".
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by alexandru.ciuncan@mxp.ro, 10.11.2008

Le roi est mort, vive le roi!
The merger between ASIBAN, BT Asigurari, and OTP Garancia will be completed by the end of 2009 and the new company will activate the Romanian market as GROUPAMA Asigurari, the French group representatives have declared on Thursday, November, 13.
So, at the end of 2009, two out of the first ten Romanian insurers and one small local insurance company will cease to exist as independent entities.
Thus, all documents regarding GROUPAMA Asigurari that need approval from the Insurance Supervisory Commission will be presented to the authority at the end of the first quarter, 2009, while the rebranding process and the launch of the company are scheduled for the next falls' end.
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by mihaela.circu@mxp.ro, 14.11.2008

The Competition Council has approved UNITA's taking-over by UNIQA
The Competition Council has authorized Austrian's group UNIQA taking-over the insurance company UNITA.
The competition regulation authority has analyzed the economic concentration operation made by UNIQA through the Competition Law (no. 21/1996) and the Regulations about authorizing economic concentrations.
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by mihaela.circu@mxp.ro, 11.11.2008

The Competition Council authorized the takeover of ARDAF and RAI by GENERALI PPF Holding
The economic concentration realized by the indirect takeover by GENERALI PPF Holding of Romanian insurance companies ARDAF and RAI, was authorized on November the 6th by the Competition Council.
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by andreea.ionete@mxp.ro, 11.11.2008

Radu VASILESCU is the new President of UNIQA - UNITA
Radu VASILESCU, ex-CEO of ING Pension Fund, was named President of UNITA (the future UNIQA Romania), the insurance company that has recently been taken by the Austrian UNIQA, market sources have stated exclusively for 1asig.ro.
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by mihai.bobocea@mxp.ro,
andreea.ionete@mxp.ro, 19.11.2008

VIG - a 34% increase in Romania
The Romanian companies members of VIENNA Insurance Group (VIG) recorded, in the third quarter of 2008, a more than 34% increase of the volume of underwritings, compared to the same period a year earlier.
"Romania is one of the core markets of VIG. As an insurance company specializing in retail, VIG is in no way affected by the unfavorable circumstances, as the growth of our companies in this region remains unchallenged in the third quarter of the year 2008", Gunter GEYER, CEO, VIENNA Insurance Group, said, referring to the positive development of the VIG companies on the local market.
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by mihaela.circu@mxp.ro, 7.11.2008

AIG Life doubles its profit in the first nine months of 2008
The Romanian insurer AIG Life had gross written premiums of RON 220 million (USD 93 million) in the first nine months of the year, growing 49% as compared to the same period of 2007. Also, the before-tax profit was RON 43 million (USD 18.2 million), meaning more than double compared to the profit registered as at September, 30, last year (a 108% growth in national currency).
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by mihaela.circu@mxp.ro, 12.11.2008

ASIROM grows with 21% in the first nine months
ASIROM's underwritings for the first three quarters were of RON 573.85 million (EUR 157.74 million), a growth of 21% in comparison with the same period of last year. At the same time, the claims paid by the company between January-September increased by 27%, to RON 338 million, from which RON 279 million were registered in the non-life segment.
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by andreea.ionete@mxp.ro, 13.11.2008

ASTRA-UNIQA increases by 82% on motor and stagnates on life in the first nine months
ASTRA-UNIQA Asigurari has ended the first nine months of the year with an increasing underwriting volume, 79% up compared to the same period of 2007 to over RON 500 million, the gross written premiums volume reaching almost RON 496 million. Meanwhile, the company recorded a profit of RON 1.31 million.
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by andreea.ionete@mxp.ro, 17.11.2008

UNITA posts nine months' loss; UNIQA promises profit in Romania over three years
UNIQA intends to grasp the huge opportunity for cross-selling and up-selling that is provided by the significant base of MTPL customers UNITA has in Romania, for the development and implementation of profitable lines of insurance.
"As compulsory products as MTPL are not a profit driver but a market share one, we will use the opportunity that UNITA gives us with its large MTPL clients database, by using it as a cross selling and up selling tool in order to implement the profitable lines of business", Dr. Andreas BRANDSTETTER, Member of the Board, UNIQA Group Austria, declared for XPRIMM Newsletters.
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by andreea.ionete@mxp.ro, 20.11.2008

AIG Romania will operate next year according to the establishment right
AIG Romania will become a subsidiary of the French company AIG Europe in 2009.
"We will become AIG Europe's branch during 2009, but the internal structure will remain the same and the employees number will not suffer any modifications", Mihnea TOBESCU, General Manager, AIG Romania has stated.
So, AIG Romania will be supervised by the France supervision authority, where AIG Europe has its headquarters.
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by mihai.cracea@mxp.ro, 18.11.2008

FATA Asigurari has doubled its underwritings volume
FATA Asigurari, GENERALI group's member, registered in the first nine months of this year, a RON 35.62 million (EUR 9.79 million) gross written premiums volume, rising with 112.68%, as compared to the same period of last year.
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by vlad.boldijar@mxp.ro, 19.11.2008

RON 414 million underwritings for ING Life
Romanian ING Life underwrote premiums of RON 414 million in the first nine months of this year growing 14% compared to the same period of the previous year.
Also, ING Life obtained in the first three quarters a before-tax profit of RON 26.4 million, a 34% growth in comparison with 3Q/2007.
Click here to read more!
by mihaela.circu@mxp.ro, 13.11.2008

ASITO KAPITAL offers GREEN CASCO for environmentally friendly cars
ASITO KAPITAL launched, at the beginning of this week, the policy GREEN CASCO - a variation of the EUROPE CASCO, a motor hull insurance dedicated to the whole range of environmentally friendly cars equipped with hybrid, electrical or alternative fuel-based engines. The GREEN CASCO policy has a price that is about 15% lower compared to the standard version of EUROPE CASCO, meant for ordinary cars, and it covers the same categories of risks.
Click here to read more!
by andreea.ionete@mxp.ro, 18.11.2008

GRAWE Romania grows by 24% in the first nine months and enters the non-life market
GRAWE Romania grew in the first three quarters of the year by 24% compared to the same period of 2007, the company's underwritings rising up to over RON 110 million, while the paid claims totalized USD 3.86 million. The company also announced that it will enter during this month in the general insurance market with a property insurance product. For this segment, GRAWE estimates underwritings of EUR 1.5 million for the next year and a total number of 17,000 new customers.
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by andreea.ionete@mxp.ro, 12.11.2008

ARDAF loses RON 50.8 million in the first three quarters
The losses registered by the insurance company ARDAF in the first nine months of the current year have exceeded with 41.26% the negative financial result from the same period of 2007, growing from RON 36 million to almost RON 50.8 million.
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by andreea.ionete@mxp.ro, 12.11.2008

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Low pulse for life in Europe
The European life insurance industry development perspectives seem to be tenebrous in the next period, mainly because of the global financial crisis. This fact has determined the clients' lack of trust into the financial institutions and has generated many problems in the insurance industry. This is one of the conclusion of the "World views for life insurance in Eastern Europe, CIS and Asia" Conference, organized by RUSSIAN Polis in Warsaw and where PRIMM - Insurance & Pensions Magazine was Media Partner.
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by vlad.panciu@mxp.ro,
oleg.doronceanu@mxp.ro, 14.11.2008

Life insurance in Russia decreased by 21.4% in Q3/2008
Russian insurance companies have wrote EUR 20.2 billion in premiums in the first nine months of the 2008, an increase by 23.3% compared to the similar period of 2007. At the same time, claims rose by 27.6% to EUR 12.4 billion, according to Federal Service for Insurance Supervision (FSIS).
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by oleg.doronceanu@mxp.ro, 12.11.2008

TRIGLAV 9-months gross premium income up 10% and profits down by 48%
ZAVAROVALNICA Triglav Group, Slovenia's largest insurer, reported a 10% annual rise in its nine-month gross premium income to EUR 772.3 million, in line with its earlier estimates, according to Slovene Press Agency. The company sees its group premium income standing at EUR 1 billion in 2008.
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by oleg.doronceanu@mxp.ro, 19.11.2008

29.8% increase for Moldavian insurance market in Q3/2008
Moldavian insurers wrote EUR 39.9 million in premiums in the first ninth months of 2008, a 29.8% increase compared to the same period of last year. At the same time, claims reached EUR 11.9 million, 28.7% more then 2007. The gross profit for insurance companies was EUR 7.4 million EUR, an increase by 79.1%, according to statistics from the National Committee for Financial Markets.
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by oleg.doronceanu@mxp.ro, 20.11.2008

Bulgarian insurers to raise MTPL insurance prices by the end of 2008
Bulgaria's major insurers may raise the price of the mandatory motor third-party liability insurance by the year's end, according to dnevnik.
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by mihai.cracea@mxp.ro, 12.11.2008

WIENER Re gets operating license in Serbia
The National Bank of Serbia granted recently an operating license to the Belgrade-based Reinsurance Company WIENER Re, the fourth reinsurance company to be registered in the Republic of Serbia.
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by oleg.doronceanu@mxp.ro, 18.11.2008

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Romania fourth in the EU in terms of retail growth potential
Romania is fourth in the European Union in terms of potential of sales on the retail market, with a growth rhythm of 73 percent forecast for the coming ten years, according to a King STURGE real estate advisory company study
Bulgaria, Lithuania, and Latvia, with 96, 86 and 74 percent, respectively, are ahead of the Romanian market. The local market growth rhythm has dropped compared to the past eight years, when it stood at 102 percent, and at which time Romania was fifth in Europe in terms of attractiveness for retailers..
"The reevaluation of commercial assets, whose market value will drop by up to 30 percent, from a high in 2007 to a low forecast for 2010, will lead to new investment opportunities for players who have liquidity, such as state-owned investment funds," explains the study.
Romania is 17th in Europe in terms of investments in shopping centers, at EUR 1.19 billion, in the 1999-2007, all of which was invested by international companies, and 2007 alone attracted investments worth EUR 676 million.
by standard.ro, 19.11.2008

Foreign investors placed EUR 1.6 billion in developing companies in Romania in 2007
Foreign investors operating in Romania placed significant amounts of money in developing their companies in 2007. 72.2 percent of total capital participations, or EUR 1.6 billion, were used for companies' development, according to data released by Romania's National Bank (BNR).
Foreign direct investments (FDI) amounted to EUR 7.25 billion last year. Some EUR 3.7 billion (51 percent of the total FDI) were net loans from foreign investors. A further 31 percent, or EUR 2.2 billion, were capital participations, while the remainder EUR 1.33 billion (18 percent) were reinvested net earnings, according to BNR data.
by standard.ro, 9.11.2008

Local constructions sector still tops growth in EU in spite of crisis
Romania's constructions sector registered the highest annual growth in the European Union, according to EU's statistics office, EUROSTAT. The country has been EU leader for several months in this field. In spite of the global crisis, which is impacting on Romania, the constructions sector registered a 27 percent annual growth.
Slovenia ranks second, with a 19.4 percent growth, followed by Bulgaria (17.7 percent) and Slovakia (17.3 percent).
On the other hand, Spain registered the most severe decline, 24.1 percent year-on-year. In Sweden, the constructions market shrunk 19.8 percent.
Of the total 27 European Union members, EUROSTAT only had data for 13 countries. Eight of them registered growth in constructions, while the sector declined in the remainder five.
Overall, the constructions sector registered a 3.8 percent decline in the EU, the same as in the euro-zone.
However, Romania ranks fifth month-on-month in the EU in terms of construction growth, with a 2.7 percent advance, equal to that of the Netherlands. Slovakia tops this ranking, with a 7.2 percent growth compared to August 2008, followed by Portugal, with 6.8 percent.
Severe monthly decline was registered in Britain (8.5 percent) and Spain (7.8 percent).
by standard.ro, 20.11.2008

BCR and BRD make two thirds of lenders' earnings
Romanian Commercial Bank (BCR) and BRD-Groupe Societe Generale (BRD-SocGen), leaders in the Romanian banking system in terms of assets, registered 62.6 percent of total net profit posted by all 40 lenders in the system in the first nine months of 2008, amounting to EUR 1 billion.
The two companies manage one third of total assets administered by Romanian banks, whose value reaches EUR 79.6 billion.
The 2008 profit registered by lenders could double compared to last year's net income, worth EUR 825 million, considering that BCR, Romania's largest bank in terms of assets, has not yet received the payment from the sale of its BCR Asigurari and BCR Life divisions.
"The net profit of banks amounted to RON 3.653 billion (EUR 1 billion) at the end of September. In the past months, the growth pace on assets has slowed. Loans are granted at a lower rate, and this rate will continue to drop, as banks are currently reevaluating their risk profile," Nicolae CINTEZA, Director of the Surveillance Bureau of the National Bank of Romania (BNR), told Business Standard. Profit growth rate forecasts for 2009 are not optimistic, as bankers are unable to add loans to their portfolio at the same rate as they did before the crisis.
by standard.ro, 18.11.2008

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THE EDITORIAL STAFF:

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, Andreea STATE, Andra BADESCU

General Secretary: Lidia POP

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

e-mail:  xprimm@primm.ro

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