XPRIMM News No. 149, February 12th, 2010

Looking optimistically towards... 2011

Firstly, one could make the option of restructuring costs. Thus, the development of alternative distribution channels, such as online sales, strengthening partnerships with brokers would be only a few solutions in this respect...
Also, 2010 is a good year to focus on increasing the quality of the services provided and on customers’ loyalty. In a time when the incomes of the customers are limited, insurers should be aware that any customer lost during this period will be extremely difficult to regain...

At the same time, an opportunity for insurers could be the insurance need of the small enterprises, which, starting this year, will pay tax on profit, not on turnover, reason for which they will have to rethink the tax optimization strategy...

It is known that 2010 will not be an easy year for the market, but it will also pass soon... We are all waiting for the revival from 2011!

by mihaela.circu@mxp.ro

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Interview with Karina ROSU,
Chief Executive Officer,
AON Romania

XPRIMM: How has the corporate segment evolved in 2009? How about the retail one?
K.R: Given that the major share in our portfolio is represented by the corporate segment, I will comment on it. This year we did not have customers that gave up insurance completely, eventually there was a restriction on the number of insurance classes, to cover only the major exposures. We had situations in which we reduced insurance costs by renegotiating insurance premiums, taking advantage of the fact that the property insurance market was and still is very competitive and/or by modifying franchises.

XPRIMM: Do you consider Bucharest a saturated market in terms of competition?
K.R: No - in terms of companies with Romanian capital. Yes - in terms of foreign investors, but here there is also the possibility of extending the local insurance lines.

XPRIMM: Is it appropriate, at this time, an expansion of the sales force? Do you think the economic situation brings new opportunities in finding people to work in insurance?
K.R: We prefer now to focus on innovative solutions for sale, not on increasing the sales force.

XPRIMM: What opportunities do you see for your company’s activity in the next period?
K.R: Increasing the number of complex projects, with high values, in infrastructure and energy, will make more and more necessary the involvement of international brokers that can offer customers, in addition to the access to international insurance markets, also complete solutions, including services of consulting and risk management. We also believe that there are significant opportunities on the employee benefits market, due to the fact that the labor force becomes more and more sophisticated and the demands of employers and employees are evolving.
It is possible that, depending on the evolution of the economy, such opportunities will materialize only towards the end of the year or even in 2011, but we will continue to consider this area as a priority in 2010, considering that the decision cycle for this type of insurance is long. We are investing in new technological solutions to efficiently access the retail market.
As you know, we have been involved for a long time in a project with great impact for the market and for consumers: participating in the organization and the implementation of the reinsurance program for PAID – the Insurance Pool against Natural Disasters, which will become operational in 2010. I think this program has great potential to revive the public perception regarding insurance and can be a positive impetus for insurers.

XPRIMM: What is the structure of the portfolio now? Has it suffered changes as a consequence of the economic crisis?
K.R: It is similar to that of 2008, with an increase in the share of property insurance in particular, due to the CAR policies for a number of infrastructure projects.

XPRIMM: How do you assess the company’s results in 2009? How are they, compared to the 2008 results?
K.R: We registered an increase of almost 10% of the volume of mediated premiums (up to approx. RON 136 million) and an increase of approximately 12% of the turnover (to almost RON 12 million).

XPRIMM: What are the main objectives of your company this year? (The total volume of mediations, personnel structure etc.)
K.R: We want to maintain a similar growth pace as in 2009. As for the team, we want to strengthen the current team through joint actions and trainings and to continue the specialization of some of our colleagues on certain lines of insurance or industries. This year, we will make significant investments in new technology solutions that allow us to streamline activities and to provide new services and the access to new customer segments.

XPRIMM: Thank you!

by oleg.doronceanu@mxp.ro

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Karina ROSU,
Chief Executive Officer,
AON Romania

UNSAR: Between 2005-2010, the MTPL tarrifs increased 3 times, the claims - 8 times
The MTPL policies tarrifs have increased over the 2005-2010 over three times, while the claims paid by insurers on the MTPL segment had a multiplying factor of 7-8. Thus, if in 2005, the MTPL claims volume amounted to RON 441 million, for the end of this year, insurers estimate a value of over RON 3 billion.
Click here to read more!
by mihaela.circu@mxp.ro, 12.02.2010

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ING Bank: Romania is out of recession
In quarterly terms, GDP has increased 0.6% in Q4, 2009, which is equivalent to going out of recession, an ING Bank analysis, taken over by Realitatea.net, shows. The estimates of the bank show that the economy increased 0.6% in the last three months of the past year vs. the previous quarter. ING Bank analysts also consider that the economic advance will continue also this quarter, and at annual level Romania will be "on plus" in the second quarter, when it will grow 1.3% against April-June 2009. As for unemployment, the economists of the bank consider that the unemployment rate could rise to 8.5-9%, but will not exceed 10 per cent.
by nineoclock.ro, 11.02.2010

EC proposes 2012 as deadline for Romania curbing its deficit
Romania took effective measures to correct its budget deficit, and the European Commission (EC) proposed to push back by one year, to 2012, the deadline for bringing the deficit under 3% of the GDP, the European executive announced on Monday.
"Romania has made a serious effort to limit the deterioration of its budget deficit and to preserve macroeconomic stability during the past year. The worsening of the economic situation since the initial recommendations were made, justifies extending the deadline by one year. But the consolidation effort must continue, under the conditions attached to the financial assistance program, to make sure that the deficit is corrected by 2012" said Joaquín ALMUNIA, European Economic and Monetary Affairs Commissioner.
In July 2009, the EC Okayed a proposition of the Commission to start an excessive deficit procedure against Romania, based on a deficit higher than 3% of the GDP in 2008, and recommended the deficit to be corrected below 3% by 2011 at latest. The initial deadline for taking effective measures was January 7, 2010.
by nineoclock.ro, 10.02.2010

Romania's commercial deficit decreased by 58.58% in 2009 to 9.73 billion euro
Romania's commercial deficit decreased last year with 58.58% to 9.73 billion EUR from 23.51 billion EUR in 2008, according to Romania's National Statistics Institute date. The decrease was due mainly because of a decrease of imports in the detriment of exports.
In the mentioned period, exports dropped by 13.9% to 29.03 billion EUR and imports diminished by 32.3% to 38.77 billion EUR. Cars and transports equipments continue to rule the exports with 42.8% followed by food, drinks and tobacco, fuel and other materials with 6% each.
In respect to imports, the biggest share is taken by cars and transports equipments with 33.8% followed by chemical products with 14%, fuel with 9.4%.
by hotnews.ro, 9.02.2010

Romanian Finance Ministry is optimistic about the country's economic recovery
Finance Ministry Sebastian VLADESCU attempted to send an optimistic message regarding Romania's economic situation and compared it to the tough winter Romanians are dealing. He said that maybe in economy it is not spring yet, but it's a less disturbing winter than the one we are dealing with.
Romanians slipped into an exaggerated pessimism regarding the capacity of the country to recover from the crisis. He underlined that the Finance ministry is not the one to take the country out of the crisis.
He said that Romania is a stable European country that is constantly evolving.
by hotnews.ro, 11.02.2010

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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
Senior Editors: Vlad PANCIU, Oleg DORONCEANU
Editors: Vlad BOLDIJAR, Oana RADU, Mihai CRACEA, Andreea STATE
General Secretary: Lidia POP

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

e-mail: xprimm@primm.ro

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