XPRIMM News No. 122, December 4th, 2008

RED CARD FOR MTPL?

The experts claim that the world economy is going through a crisis that will surely also impact the Romanian insurance market and something needs to be done.

In sports, an referee tough and ferm decisions, even if they are justified or not, can discontent the affected players who appreciate a decision as being fair or not depending on their own interests.

In the context in which the Supervisory Insurance Commission (CSA) has decided to limit the brokers' commission for the MTPL insurance to 15%, we can ask ourselves two things - if this is the main problem on the market and how appropriate is this measure.

Commenting the insurance authority's decision, many of the ones who posted their opinions on the portal 1asig.ro consider that this should have been part of a larger set of measures meant to attenuate the crisis.

In its absence, the responders feel that the CSA normative seems to be directed more towards the effect and not the cause and that things should be approached in the context and not particularly.

In a free market there is no such thing as a too big or too small commission, it being the result of the negociation between two partners.

Otherwise, there will always be ways of avoiding this kind of measures.

by alex.rosca@mxp.ro

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Interview with
Andreas BRANDSTETTER, Member of the Board,
UNIQA Group Austria
and
Wolfgang KINDL, Managing Director, UNIQA International

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Andreas BRANDSTETTER,
Member of the Board UNIQA Group Austria

Wolfgang KINDL, Managing Director, UNIQA International

Corporate capitalism at the edge

The global financial crisis puts a question mark upon the corporate system's health. The corporations were born in the wild capitalism times around the year 1900, when the capital aggregation in the New World was based on the change of power proportion between Europe and USA, especially in the economic sense. In that moment, the corporations were private or cvasi-private entities, controlled by a few persons which also ensured the company's management. The market position, a monopolistic one, ensured large amount of capital in the companies' activities, and the capital market business had exclusively the role to ensure financing (through launching shares primary offers) or to avoid the lack of transparency.

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Dragos CABAT

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Towards EUR 2.5 billion
• During the first 9 months of 2008 the Romanian insurance market grew by 13.54% up to an amount of EUR 1.8 billion
• In absolute value, the market grew by EUR 220 million
• The total amount of the claims paid during the analyzed period exceeded EUR 800 million.
• Motor Hull insurnace grew more than 30% and gained 5 percentage points share in the market.
• The gross technical reserves for non-life insurance amounted EUR 1.6 billion covered by assets in a share of 118.4%
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by alex.rosca@mxp.ro, 4.12.2008

Nine months 2008: EUR 1.8 billion underwritings have brought claims of EUR 830 million
The insurance market gross written premiums' value reached RON 6.68 billion in the first nine months of 2008, according to the Insurance Supervisory Commission (CSA) data. As to the average currency RON/EUR for the analyzed period, the insurance market value outran EUR 1.8 billion. In comparison to the results of the same period of last year, the insurance market really grew with more than 17%, in national currency and with 13.83% nominally in EUR.
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by alex.rosca@mxp.ro, 26.11.2008

EUR HALF BILLION IN 9 MONTHS
The Romanian insurance mediation market has reached, after the first nine months of the year, a total amount of mediated premium of EUR 500 million, according to INSURANCE Profile estimation. Compared to the same period of last year, in January - September 2008, the real growth of the business was 65.81%, while the nominal growth in euro was 61.29%. Also, the insurance mediation market represents, more than 27.23% from the gross written premium by the all Romanian insurance companies.
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by vlad.boldijar@mxp.ro, 3.12.2008

CSA temporarily forbids UNITA's activity
The Insurance Supervisory Commission's (CSA's) Council decided to forbid UNITA VIENNA Insurance Group insurance and/or reinsurance activities for the moment. This decision was taken as the new shareholders - UNIQA International Beteiligungs-Verwaltungs si UNIQA International Versicherungs Holding - did not request and obtain CSA's approval, according to the present law, the supervision authority has announced.
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by andreea.ionete@mxp.ro, 26.11.2008

Electronic on-line policies from ALLIANZ-TIRIAC
The company ALLIANZ-TIRIAC offers, starting with November 24th 2008, the possibility of on-line operating electronic insurance policies.
"Through its proposed solutions, ALLIANZ-TIRIAC is able to "swim against the current", by reducing the motor insurance underwritings, while all the other companies have to grow their tariffs", Cristian CONSTANTINESCU, General Manager, ALLIANZ-TIRIAC, has stated.
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by mihaela.circu@mxp.ro, 24.11.2008

ASIBAN has a RON 468 million business in the first nine months
ASIBAN, one of the three companies which was bought by the French GROUPAMA and recently entered in a merger process with BT Asigurari and OTP Garancia, finalized the first nine months of 2008 with underwritings that value RON 468.2 million.
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by andreea.ionete@mxp.ro, 3.12.2008

A RON 240.2 million business for BT Asigurari in the first nine months of 2008
BT Asigurari, one of the three companies bought by the French GROUPAMA and recently found in a merger process with ASIBAN and OTP Garancia, closed the first nine months with an over 14.8% growth in the underwritings income. Therefore, the gross written premiums valued RON 240.2 million, according to the results sent to the Magazine INSURANCE Profile by BT Asigurari.
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by andreea.ionete@mxp.ro, 28.11.2008

A 60% growth for MARSH Romania
MARSH Romania's intermediation volume made in the first nine months of 2008 registered a 60% nominal growth in the European currency, compared to the same period of 2007, meaning over EUR 47.34 million (RON 172.30 million), according to the forecasts made by the Specialized Magazine INSURANCE Profile.
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by vlad.boldijar@mxp.ro, 2.12.2008

GENERALI Asigurari - a 50% growth on the life segment
GENERALI Asigurari recorded a total volume of underwritings of RON 318.9 million, up 13.5% compared to the same period of 2007 (RON 281 million), in the context of the 50% advance of gross written premiums in the life insurance class, up to RON 63.7 million.
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by andreea.ionete@mxp.ro, 26.11.2008

EUR 23.30 million mediated premiums for AON Romania
The insurance brokerage company AON Romania has mediated, in the first nine months of this year, a volume of premiums of EUR 23.30 million (RON 84.80 million), which represents a real evolution, in national currency, of 8,68% compared to the same period of 2007.
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by vlad.boldijar@mxp.ro, 25.11.2008

Business of more than RON 80 million for AIG Romania in the first nine months
The general insurance company AIG Romania finished the first three quarters of the year in a slight decrease compared to the similar period of time of 2007, as the volume of business dropped down from RON 81.46 million to RON 80.52 million.
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by andreea.ionete@mxp.ro, 26.11.2008

GROUPAMA brings EUR 25.4 million to the ASIBAN capital
GROUPAMA injected EUR 25.4 million in the social capital of the ASIBAN, taken over by the French in April this year, according to the National Office of Trade Register.
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by andreea.ionete@mxp.ro, 25.11.2008

EUROASIG in bankruptcy
The Insurance Supervisory Commission's (ISC's) Council considered that the insurance company EUROASIG is insolvent, after being put under special administration since August 2008 and decided to launch the bankruptcy procedure against it.
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by andreea.ionete@mxp.ro, 2.12.2008

Romania's mandatory pension funds post 5.1% net return after 6 months of operation
ROMANIA. The country's freshly launched mandatory pension funds (2nd pillar pensions) managed to post a net weighted average return of 5.1% for the first six months of operation, according to an analysis by www.privatepensions.ro.
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by mihai.bobocea@mxp.ro, 4.12.2008

EXCLUSIVE: CSSPP rejected the BCR - OMNIASIG deal to merge their mandatory pension funds
ROMANIA, EXCLUSIVE. CSSPP, Romania's private pensions supervisory authority, voted against the deal proposed by BCR Leasing and OMNIASIG Pensions, in which BCR Leasing was going to buy OMNIASIG's shares, with the ultimate goal to merge the mandatory private pension funds (2nd pillar pensions) managed by BCR and OMNIASIG - CSSPP confirmed exclusively for www.privatepensions.ro, after an official inquiry made by our webportal.
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by mihai.bobocea@mxp.ro, 21.11.2008

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ALLIANZ confirms its profitable growth strategy in New Europe
German-based group ALLIANZ posted EUR 3.2 billion in premiums in New Europe in the first nine months of 2008, an increase by 11 percent comparing to similar period of the last year. Operating profit increased by more than 3 percent to EUR 272 million, compared to EUR 263 million in the same period of last year.
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oleg.doronceanu@mxp.ro, 1.12.2008

Ukrainian insurance market reached EUR 1.9 billion in Q3/2008
Insurance companies have written EUR 1.9 billion in premiums in the first nine months, up 40.8% compared to the same period of 2007, according to the State Commission for Regulation of Financial Market.
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by oleg.doronceanu@mxp.ro, 1.12.2008

Emerging markets pointed an 11.6% increase to USD 199 billion in 2007
Non-life insurance premiums in emerging markets grew by 11.6% to USD 199 billion in 2007, a study by SWISS Reinsurance reveals.
The latest sigma study by the Switzerland-based reinsurer identified Eastern Europe (+12%), South and East Asia (13+) and the Middle East (12+) as the fastest growing non-life markets.
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by oleg.doronceanu@mxp.ro, 2.12.2008

November Reinsurance Business Meetings have taken place for the seventh time on November 27-28.
570 participants and guests from 22 countries attended the Event at Moscow's prestigious President Hotel to conduct negotiations and to present new reinsurance products and programs. The event was organized by All-Russian Insurance Association, in partnership with BUSSINES Character Group. PRIMM Insurance &Pensions Magazine was traditionally a Media Sponsor of the conference.
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by oleg.doronceanu@mxp.ro, 2.12.2008

SCOR Re to establish a subsidiary in Moscow
French-based reinsurer SCOR Re, which has had a presence in Moscow for 10 years, said that it has applied for a license in Russia for a subsidiary for 2009.
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by oleg.doronceanu@mxp.ro, 3.12.2008

SAVA Re's 9-mo net profit down 41% to EUR 4.6 M
Slovenia's biggest reinsurer SAVA Re posted EUR 4.6 million in net profit in the first nine months, down by 41% as compared to the respective period last year, according to Slovene Pres Agency.
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by oleg.doronceanu@mxp.ro, 1.12.2008

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Romania's economy up 9.1 percent in Q3
Romania's Gross Domestic Product (GDP) rose 9.1 percent in the third quarter of 2008, up to EUR 38.9 billion, slightly above analysts' estimates, according to data released by the National Institute of Statistics (INS).
For the first nine months of 2008, the economic growth was 8.9 percent and the GDP amounted to EUR 92.1 billion. Financial market analysts interviewed by Business Standard were expecting a 7-9 percent economic growth the third quarter. For most economists, agriculture played a major role in the July-September period.
GDP was high in the third quarter, especially compared to other countries in the region. Agriculture was the main engine for this economic growth, followed by construction," said Lucian ANGHEL, Chief Economist of Romanian Commercial Bank (BCR). In the second quarter, the GDP rose a staggering 9.3 percent, while the growth for Q1 amounted to 8.8 percent.
In its latest forecast, the National Commission for Prognosis (CNP) estimated a 9.1 percent economic growth for the entire 2008. Last year, the GDP advanced by 6 percent, up to EUR 121.2 billion.
by standard.ro, 3.12.2008

ISARESCU: Romania's economic growth in 2009 will be 3-6%
Romania could register 3-6 percent economic growth in 2009, said Mugur ISARESCU, Governor of the National Bank of Romania (BNR). ISARESCU's estimate is rather broad, considering that economic growth will depend on two factors: "the political component" and the effects of the international financial crisis. BNR's Governor said that Romania should adjust the current account deficit while the country is still registering economic growth, considering that "nobody will finance us" at a foreign deficit of 14 percent of GDP.
Also, the unemployment rate could rise in 2009. To solve this problem, the job market needs to be flexible. ISARESCU added that if many of the Romanians working abroad decide to return home, Romania should focus on requalifying the workforce in the areas of infrastructure and agriculture.
The economic growth forecast presented by BNR's Governor is more optimistic than that forwarded by certain financial analysts. The National Prognosis Commission (CNP) is maintaining its six percent forecast for Romania's economic growth in 2009.
by standard.ro, 2.12.2008

Infrastructure will boost the equipment market by 10-20% in 2009
The construction equipment market will rise by a mere 30 percent in 2008, after two consecutive years in which equipment sales doubled annually, due to the construction sector boom, while a 10-20 percent increase is expected in 2009, according to players in the field.
"This sector will register less intensive activity in the coming six months. But in spring, when much infrastructure work is scheduled, the demand for equipment will soar. I look at 2009 with optimism and estimate a 20-50 market growth rate, based on promises made to initiate large projects in infrastructure and hydro technical design", said Razvan MARCU, Marketing Manager of MARCOM, a major player on the local market.
MARCU said that the crisis will not affect large companies, who have a solid market position, a strong client base, partners, a modern equipment park, and qualified personnel.
On the other hand, Dragos IORGA, General Manager of the EUROMAT company, member of the Association of Construction Equipment Distributors (ADUC), said that problems related to the financial crisis will slow the market's growth pace, to a mere 10 percent. IORGA added that the crisis will lead to a series of bankruptcies and takeovers of small producers, but will not affect importers.
The construction equipment market rose by an annual 33 percent in this year's first nine months, and the growth rate estimated for the end of 2008 is of maximum 30 percent, considering the drop in demand usually registered in winter. Major competitors on the local construction equipment market, valuated at EUR 350-400 million, include MARCOM, TERRA Romania, AUTOCONSTRUCT, LIEBHERR, and POWERTEK.
by standard.ro, 2.12.2008

Stock market investors recovered EUR 1 billion in one month
The Bucharest Stock Exchange (BVB) is today closing the month with the highest increase in indexes of the entire year. After historic losses registered in October, shares of stock market investors are worth an extra EUR 1 billion month-on-month. A record low in quotations was registered on BVB on October 27. Since then, financial investment companies (SIF) have recovered 50 percent of their value, while the largest listed companies, PETROM oil group and BRD-Groupe Societe Generale lender, gained 40 and 20 percent, respectively.
Although the total value of companies listed on BVB rose EUR 1 billion in one month, the growth registered in November only makes up a small portion of losses posted throughout this year by stock market investors. It did not even cover for losses registered in October. When the stock market hit a historic low, on October 27, the listed companies' loss in capitalization totaled EUR 12 billion, compared to the end of September.
by standard.ro, 28.11.2008

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President: Sergiu COSTACHE CEO: Adriana PANCIU
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