No. 141, October 1st, 2009
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XPRIMM
News - THE ROMANIAN INSURANCE MARKET NEWSLETTER No. 141, October 1st, 2009 Click here to subscribe! Click here to unsubscribe! |
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Subsequently, the real estate boom and the massive development of mortgage loans gave a strong impulse, but still insufficient, to household insurance for individuals, by imposing the buying of such a policy for the purchased property. So, we can say that, between these two moments, separated by about 20 years, the Romanians' level of education, necessary to generate the individual initiative to protect the house, has not evolved very much. Instead, the risks to which Romania is exposed, especially the capital city, are more than real... If we consider that Bucharest concentrates around 9% of the country's population and is responsible for 20% of the GDP in Romania, the scenarios of an earthquake similar in magnitude to that of 1977 or of destruction of dams in Bucharest, highlighted in the Plan of analysis and coverage of risks created by the Bucharest City Hall, would have a devastating impact, both on the the population and on the economy. With only 10% of the total number of houses in Romania covered through voluntary insurance, and with the mandatory household insurance law still being expected, the problem of uncovered damage that could result from a natural disaster cannot be left for solving only to the State, the more so as each of us has at hand the solution: household insurance. This is the context in which ICAR - the International Catastrophic Risks Forum - Europe's main event on catastrophic risks, takes place. Organized in partnership by the Ministry of Administration and Interior and Media XPRIMM, the sixth Edition of ICAR takes place on October 12, 2009, at the Parliament Palace in Bucharest. by andreea.ionete@mxp.ro |
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| INTERVIEW |
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Interview
with Viorel VASILE, Viorel VASILE: In a global economic environment strongly affected by the collapse of capital markets and by the temporary lack of cash, the Romanian insurance brokerage market recorded, in our opinion, a decrease in mediated volumes, as an effect of cutdown of activity of the corporate clients. Regarding SAFETY Broker de Asigurare, we tried to benefit from this troubled period and to attract new clients across the country through direct sales, especially in the retail area. In order to implement this strategy, we have started an action of nationwide expansion, by opening more sales points in major cities, and also by developing our own franchise network. The insurance classes that have suffered the biggest depreciation are the life insurance ones, and mainly those with capital accumulation, unit-linked type. XPRIMM: How do you consider the brokerage market will evolve by the end of the year? But in 2010? V. V.: In our opinion, the insurance brokerage market will not decrease compared with 2008, but it will not register an increase of more than 5% in 2009. Starting 2010, provided that the national economy will start to show signs of life again, particularly through fundraising in the economic circuit, automatically the insurance market, namely that of insurance brokers, will also resume its upward course. XPRIMM: What were the consequences of limiting the commission fee to 15% for MTPL policies and how did this affect the profitability of the brokerage activity? V. V.: Limiting the commission for the MTPL policies to the maximum threshold of 15% of the value of insurance premiums has had an impact on the cash-flow of insurance brokers. A major negative impact of this limitation was suffered especially by the brokers who focused mainly on this type of insurance, some of them coming even to the point of abandoning the business. XPRIMM: What do you think is the most acute problem of the market for the next period? Which are the solutions for the development of the brokerage market in times of crisis? V. V.: The most acute problem of insurance brokers in this time of crisis, when large corporate clients have difficulties, is the attempt to keep them active and to offer optimal solutions. At the same time, developing the retail market is and will be, in our opinion, the medium and long term solution. The role of the insurance broker in this economic period is very important because he, besides the ability to sell insurance products, must also have good professional training, in order to correcty present all the elements of the insurance product to the customer and thus to persuade him of the importance and the necessity of buying an insurance policy, by offering complete services: risk analysis, selling the policy and, in addition, advice in case of claim. Thus, as the customer becomes more and more aware of the importance of the insurance broker, he saves time, gets the best offers on the market and benefits from technical support that he would not have had if he had bought the policy directly from an insurance company. XPRIMM: How will the share of brokers' mediations in the total of the underwritings evolve? (In 2008, it was 27%, and in Q1/2009, 23%, in decrease). What share do you estimate for the current year? V. V.: In general, the analysis made at half a year is not very conclusive, because the insurance brokerage market is focused on motor insurance. Car fleet renewals are made at the end of each year and the decrease registered in the first half of 2009 compared with the previous period of last year is not relevant. In our opinion, the brokerage market will grow compared to last year, although the growth will not be more than 5%, and thus the share in the total insurance market will remain the same as last year. XPRIMM: How did the crisis influence people's perception regarding insurance? Which insurance classes have development potential in the next period? V. V.: Insurance has always been an alternative to reduce the risk and, except for the situations in which it has a mandatory character imposed by the law, the insurance contract is random. Thus, we believe that the general perception of customers was not affected by this economic downturn, but only their availability to buy insurance policies, due to the lack of cash on the market. Regarding the possibility of development, we would go for property insurance, and also liability insurance, in general, as having "an appetite" for development. XPRIMM: Two months ago, the amicable report of road accidents was introduced. What is the role of the broker, as a representative of the client in this regard, and what has been achieved so far? V. V.: The role of the broker is to advise and actively assist clients in using the amicable report and throughout the elaboration of the claims file. It is natural for the insurance broker to be immediately by the client's side in difficult moments, which is why SAFETY Broker developed a specialized department to support its clients throughout the process of elaboration of claims files. XPRIMM: What are the expected results of the company you represent at the end of this year, compared to the previous year? V. V.: For 2009, SAFETY Broker estimates an increase of 10% (approximately EUR 11 million - gross written premiums) compared to the previous year, due to the retail lines and due to the territorial development, with its own sales points and franchises. XPRIMM: Thank you! |
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| TOP PRESS |
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FIAR 2010 - Only one week for the SPECIAL OFFER PAID was founded Major European groups own over 80% of the motor insurance market Let the battle begin! CIG Romania Asigurari de Viata is being launched AIG Romania will become a branch of CHARTIS Europe CERTASIG, a new player on the health insurance market The Ministry of Administration and Interior supports ICAR 2009 An extra EUR 12.6 million to EUREKO Asigurari's share capital New from EUROTAXGlass's B.A.A.R. intends to become part of the protocol of cooperation
regarding the amicable report 19% decrease for health policies Travel insurance reached the level of 2006
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| CEE, RUSSIA&CIS |
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The 5th International Conference "World Views for LIFE INSURANCE
in Eastern Europe, CIS and Asia" November Business Meetings in Moscow KAZAKHSTAN: The number of mandatory insurance will be reduced First year-on-year drop for Serbian insurance market |
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| FINANCIAL NEWS |
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PwC: Holding law could attract investors FDI in Romania to remain at EUR 5 billion in 2010 The IMF tranche will leave more money for the private economy |
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| EVENTS | ||
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THE EDITORIAL STAFF: |
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| XPRIMM
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