No. 142, October 15th, 2009
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XPRIMM
News - THE ROMANIAN INSURANCE MARKET NEWSLETTER No. 142, October 15th, 2009 Click here to subscribe! Click here to unsubscribe! |
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| MENU: EDITORIAL | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS | |
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| EDITORIAL |
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So, the question could be translated into: When do you think the mandatory household insurance will be implemented? For years, the concept of mandatory household insurance has long been debated. Then, for other years, there were lots of discussions regarding its implementation. And, each time, the word of order was ... let’s wait a little longer. But the risks do not wait! … Risks have no patience for legislative changes, methodological requirements or constitution of pools. We know that... then why to expect a mandatory insurance? Waiting involves a contemplative attitude. If you face a risk, such an approach can sometimes be fatal! Punctually, an active attitude towards the risks to which the dwellings are exposed can be only one, both of the companies and of the insured: voluntary insurance! Why wait until November, January, July or maybe even further? ... by alex.rosca@mxp.ro |
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| INTERVIEW |
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Interview
with Michaela KOLLER, Michaela KOLLER: The main challenge for the CEA is to ensure that the regulatory environment for European (re)insurers is not unduly affected by either short-term or long-term regulatory changes stemming from the economic crisis. The CEA is working to ensure that any changes take into account the specific characteristics of insurance and are appropriate for the industry. The CEA is monitoring and engaging in the debates on initiatives at EU and international level to change the existing supervisory architecture and on other legislative responses to the crisis in the supervisory and the consumer protection areas. The CEA is working to promote a positive image of the insurance industry by demonstrating the general resilience of (re)insurers during the crisis and by showing that insurance is not a driver of systemic risk. Also, CEA expects consumer protection issues to feature strongly in the work plan of the new European Commission, partly as a result of the crisis. For example, the Commission is expected to publish a White Paper later this year or early next on possible legislation and options for insurance guarantee schemes in the EU. PRIMM: What are the key differences between the business models of the banking and insurance industries and why the merger of banking and insurance authorities is not advisable? M. K.: The principal aim of insurers when investing in assets is to cover their commitments to policyholders. Their assets’ allocation is driven by the objective of matching the expected liability cash flows in terms of amount, timing and risk. Insurers therefore generally invest in products with well defined cash flows and risk profiles and largely limit the risk profile of their investments so that it is in line with their commitments to policyholders. The fact that insurers do not use leverage to enhance their investment returns means that they are less exposed to fluctuations in financial markets. In contrast to other financial services provides, such as banks, insurers are also characterised by the inversion of their cost/revenue cycles. This means that insurers are primarily funded by policyholders’ premiums, making them less exposed to liquidity risk and to any problems accessing credit markets. Indeed, the insurance industry could be said to have had a stabilising effect on financial markets as a result of its anti-cyclical behaviour. It is these differences in business models that necessitate separate supervision for banks and insurers. The CEA believes that improved coordination and cooperation arrangements between authorities are the best way to achieve cross-sectoral consistency. PRIMM: What does CEA think about the group supervision and the fact that its introduction has been left out of the approved Solvency II Framework Directive? M. K.: The CEA has always made clear its support for group supervision, arguing for effective cooperation and trust between supervisors and a supervisory regime based on the economic reality of groups. The CEA believes that carving out group support from the text of the Framework Directive means that Europe has missed the opportunity to introduce a tool that would have met the need for the efficient and effective supervision of multinational groups. PRIMM: Which is the main purpose of the reforms to the EU’s supervisory framework for financial services that were proposed by the De Larosière Group and carried forward by the European Commission? M. K.: The mandate of the De Larosière Group was to make recommendations on strengthening European supervisory arrangements in order to establish a more efficient, integrated and sustainable European system of supervision and to reinforce cooperation between European supervisors and their international counterparts. The CEA welcomed the recommendations of the De Larosière Group and the EC’s subsequent Communication on supervisory architecture. It strongly supports the transformation of the three Level 3 committees that represent the EU’s insurance, banking and securities supervisors into European authorities with the ability to make certain binding decisions and with a mediation role. The CEA has, however, called for greater representation of the insurance sector on the new European Systemic Risk Council, even though the insurance sector is not a driver of systemic risk. PRIMM: Which of the relevant experiences accumulated in the Western markets do you think would be transferable/suitable for an emerging market, as the Romanian one? M. K.: Diversification is one of the fundamentals of the insurance business model because it helps spread risk, which allows for the shifting of risk for reasonable pricing. Motor insurance is still the most important business line in Romania, but insurance companies in Romania are increasingly diversifying their portfolio to other lines of business. This process will make the Romanian insurance market stronger and more resilient. PRIMM: Which would be the most efficient ways to enhance the public financial education, including its attitude towards insurance? M. K.: Financial education has a vital role to play in ensuring that European citizens are equipped with the knowledge they need when making important decisions for themselves and their families. Financial education raises awareness and allows consumers to make appropriate choices when considering, for example, how to ensure an adequate level of insurance cover, how to organise credit or how best to make provisions for retirement. Improving financial literacy in Europe is a societal challenge which requires the contribution of a range of different stakeholders. Public authorities, the private sector, academia and others can all play their part when addressing knowledge deficits amongst consumers regarding the wide range of financial products and services on offer. The European insurance industry actively promotes financial literacy via a range of excellent initiatives throughout Europe. |
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| TOP PRESS |
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Baden-Baden XPRIMM Reception Household insurance, mandatory from July 1, 2010 EXCLUSIVE: Constantin TOMA is the President of PAID Marius BULUGEA - General Manager in PAID 25% of the houses in Romania - insured at July 1, 2009 World Bank supports amending the household insurance law Radu MUSTATEA: The coverage degree of mandatory insurance -
30%, in the first year Constantin TOMA leaves OMNIASIG VIG Mihai ATANASOAEI: Public-private partnership, essential to educate
the population ANDRIESCU: Brokers will contribute to the sale of voluntary household
insurance Mission impossible? The professionalism of the human capital will
decide CEA: Portfolio diversification and financial education, the main
factors for the insurance market stability ASTRA Asigurari - leader on the non-motor segment UNIQA redefines insurance distribution in Romania Over 70% of Romanians that currently have a Motor Hull policy had
bought it on their own initiative CIG Romania aims for underwritings of EUR 6 million at the end of
2010 UNIQA Asigurari is counting on rebalancing the portfolio this year VIG could enter PAID Stefan VANCEK is the new Commercial Manager of GENERALI Asigurari |
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| CEE, RUSSIA&CIS |
| Polish Government and EUREKO reached an agreement The Polish government and Dutch-based EUREKO reached an agreement in early October, ending an eight-year dispute over PZU SA and clearing the way for a share sale by the country’s top insurer. The agreement guarantees to Dutch insurer USD 4.33 billion in dividends, compensation for damages and proceeds from cutting its 33% stake in PZU to 18%. This accord secures EUREKO’s “controlled exit” from the insurer, whose value after the dividend payout is about EUR 6 billon. Click here to read more! by eugen.spivacenco@mxp.ro, 6.10.2009 The 5th International Conference "World Views for LIFE INSURANCE in Eastern Europe, CIS and Asia" 17th - 18th November 2009, Hotel Baltschug Kempinski, Moscow, Russia In November, Moscow will once again host one of the key conferences on life, bancassurance and asset management in emerging markets. Click here to read more! by oleg.doronceanu@mxp.ro, 15.10.2009 November Business Meetings in Moscow On 24-25 November 2009, for the 8th time, the Russian capital, Moscow, will be the venue of the November Business Meetings of Reinsurers, organized by All-Russian Insurance Association and "Business Character" Group, with the support of PRIMM - Insurance & Pensions Magazine as Media Partner. The event will be held at Holiday Inn SOKOLNIKI. Click here to read more! by eugen.spivacenco@mxp.ro, 15.10.2009 VIG underwrites EUR 4.25 billion in 6 months The VIENNA Insurance Group reported a stable development in the first six months of this year, the volume of gross written premiums amounting to EUR 4.25 billion, up 0.9% compared to same period in 2008. Click here to read more! by vlad.boldijar@mxp.ro, 15.10.2009 PZU Group - Almost 80% growth of profit During the first half of 2009, the PZU Group collected a total of EUR 1,95 billion in insurance premiums, achieving a net financial result of EUR 559 million. This significant growth, in comparison to the result obtained in H1 of the previous year, is attributed to the Group’s new strategy, and to better results on investment activity, achieved by the Group’s companies. Click here to read more! by vlad.boldijar@mxp.ro, 15.10.2009 Second quarter of decrease for Kazakh insurers Insurance companies from Kazakhstan ended the first half of this year with a 27% drop in written premiums, according to Kazakhstan National Financial Supervisor. Click here to read more! by eugen.spivacenco@mxp.ro, 15.10.2009 |
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| FINANCIAL NEWS |
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Financial markets expect BNR to keep the exchange rate below RON 4.3/
EUR 1 The financial sector and the industry dominate the top 10 capital
increases in 2009 Romania’s government bond rating, stable at Baa3 |
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