No. 164, September 23rd, 2010
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XPRIMM
News - THE ROMANIAN INSURANCE MARKET NEWSLETTER No. 164, September 23rd, 2010 Click here to subscribe! Click here to unsubscribe! |
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| EDITORIAL |
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September 15, 2010 - two years later, the effects of the largest financial downturn in history are still being felt, given that the global economy tries to find the road to economic recovery... The "rollers" that followed the fall of the Wall Street colossus have also affected Romania, even if, in autumn of 2008 and spring of 2009, the optimism characterized both authorities and top analysts. Crisis... It seemed too ugly a word for a reality so beautiful as the economy of Romania... But it was the reality of a hard landing that has awaken all from dreaming. Romania's economy collapsed in 2009 with 7%, and this year's GDP will drop by another 2%. The insurance market has also felt the full shock of a sudden braking, as the volume of underwritings has decreased significantly. Even more, looking at present figures, we notice how the economic contextual crisis overlaps - as in the national economy - the conceptual crisis in insurance. When we say conceptual, we are referring to a structure dominated by the motor class, that shows us now the deficits of a system that seems shaped so that all shareholders bring money from home. In the years of economic boom, the measures for structural change in the construction of the market have been delayed. Now, the reasons do not matter anymore. Currently, we only think what will be the effects... and, occasionally, about the solutions... To end in an optimistic note, we recall the quoting of an illustrious analyst, a historically proven fact: "Economic crises have a common feature, which stops people from going crazy: they come and they go". Important are the lessons which remain after them... by mihaela.circu@mxp.ro |
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| INTERVIEW |
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Liviu CHIRIC: The crisis period found us somewhat prepared, in the idea that the shareholder UNIQA Asigurari de Viata had the intention to enter the market since 2008-2009 and only now we passed well and we completed all stages and administrative and technical procedures. We consider the crisis as an opportunity, not just a challenge, in the idea that many successful businesses were launched and started during the crisis. On the other hand, we are not the only ones to start business in this period, from our knowledge there are two more companies that received approval at the same time with us. But we can say we are unique, because we want to come up with an approach different from those the Romanian market was used to. XPRIMM: What does this new approach consist of? L. C.: First of all, I should mention that our shareholding consists of UNIQA International Beteiligungs-Verwaltungs GmbH and UNIQA Asigurari S.A. - this shareholding is the market leader in Austria, being specialized on life insurance and on health insurance. We want to take advantage of this experience and to transpose (the model used there in the Romanian market. As it is known, the Austrian healthcare system and all the Western ones represent a quality model that we want to transpose to Romania, as well. We have the know-how and we want to bring it, in a relatively short time, to the Romanian market, so that our future customers will benefit as soon as possible of higher quality services. XPRIMM: Regarding the products that you want to bring on the market at the moment, can you tell us if they fit into the existing range from our market or if you intend to come up with something new, as well? L. C.: Unfortunately, the Romanian insurance market, especially the life insurance market, has stayed, in recent years, within a classical "frame". What I could notice, coming back after a longer period in which I had not been on the insurance market, was primarily a lack of imagination to generate new products more adapted to the mentality and needs of Romanians. Obviously, they must be adjusted to the crisis period we are in, and therefore we turned to traditional protection insurance, insurance that we have shaped into an easier-to-sell and simpler form, and avoid those products that are complicated for the customer. XPRIMM: Will you offer both traditional insurance and unit-linked policies? L. C.: In our study of feasibility, we also have unit-linked products, with the assumption that the Romanians appetite for risk continues to be high. According to the latest market developments, confirming the increase in life insurance, I believe that that appetite has not disappeared, even though many unit-linked products have been surrendered and the desire to "play" over a classic level in the risk zone remains high. Much of the areas of risk investment - I am referring to stock exchanges and other areas in which it has been invested, with a pretty big risk - have "fallen" a lot, therefore I believe that the re-orientation of future customers will shift again to this area. However, at present we have to prepare very carefully these high risk products, a matter of extreme importance being the strategy of approaching the problem and of launching them, under the circumstances in which the market has been, for many years, assaulted by such offers - basically, insurance mediaries have achieved peak efficiency by selling these hardly-marketable products. But, perhaps in collaboration with insurance mediaries and considering other strategic partnerships, respectively in bancassurance, with RAIFFEISEN Bank, and seeking alternative channels, we will probably succeed, in late 2010 or early next year, to come up with something new and innovative on the market. XPRIMM: What are your company's objectives by the end of the year? What can you tell us about your targets? L. C.: Firstly, I must point out that only on April 8th, 2010, we have obtained the effective functioning authorization. Therefore, we succeeded in a very short time to make our presence felt on the market, being accepted as full members of UNSAR on April 26th, and on July 1st we have already managed to issue our first policy. In terms of gross premiums collected, that we forecast for the end of this year, it's pretty hard to create illusions that in six months we will be able to achieve our purpose - which, for the next period, respectively for next year, is to enter the Top 10 life insurance companies, but we are taking advantage of this "more relaxed" period to prepare the ground for what we are going to do in 2011 and in the following years. We have to move on that path that will make us follow your business plan that we have proposed to the Insurance Supervisory Commission and to adapt as quickly as possible to a continuously moving market. XPRIMM: What measures do you think the Romanian state should take at this moment in order to stimulate the life insurance segment? Could the much-discussed deductibility be a solution? L. C.: Deductibility is, by far, the easiest thing to do, from the state's point of view. But the ground must be prepared, so that such an approach of the state to reach its initial goals and not be wasted in areas that, basically, lead to hinder or slowdown of the activity. Life insurance, as you know, is closely related to a major problem, that of medical services - health insurance. It is an area which, in my view, should be regarded with more interest, and that is exactly what we are doing now, by the products that we have promoted. In this area, the state should really express an opinion, and start by increasing the deductibility of insurance costs, and especially for health insurance. I am referring here to a simple comparison: medical services market at the moment has reached a value of around EUR 60 million, compared with the health insurance market, which fell from EUR 6.5 million to EUR 4.5 million. It's a fantastic difference, which insurers, along with private providers of medical services should recover and they should find a common point, for the clients' best interest, in particular, and hence for the benefit of insurers and healthcare services providers. XPRIMM: What is, in your opinion, the most pressing problem that we are currently facing in the insurance market, in general, and in life insurance, in particular? L. C.: In my opinion, winning the trust of clients and finding new solutions that are not lacked of imagination and that are oriented strictly towards the clients, towards common people, as they are the ones insurance is addressed to. We clearly observed a loss of customer confidence, also caused by what is happening on the general insurance segment, but, overall, the existing declines are striclty the result of an existing lack of clients' confidence in life insurance products. It has been clearly proven that the existing surrenders have equally affected both insurers and insured, that those surrenders did not come on real basis, but were based on a lack of confidence in what was happening and in the guarantees offered by insurers, in conjunction with the existing situation of crisis. XPRIMM: What is your message for the Romanian profile market? L. C.: It's hard for me to send a message, because I was away for a period, and when you are coming from outside the market things seem different and you think you can straighten them out or can help to straighten them out. Therefore, I will wait a while, to adjust, and only then will I be able to answer your question. In any case, as they say, "hope dies last", hence we must not lose hope that things will go in a better direction, starting from the premise that the "bottom of the ocean" (or the "maximum point of the crisis") has already been reached. XPRIMM: Thank you! |
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| TOP PRESS |
Countdown to Baden - Baden XPRIMM Reception has begun As preparations continue for the second edition of Baden-Baden XPRIMM Reception, you should take this opportunity to join the already confirmed leaders and specialists in insurance, reinsurance and related areas, who attend the Meetings in Baden-Baden. Part of the campaign launched last year by the Romanian insurance industry in Baden - Baden, this event will take place on October 24th, 2010. Baden - Baden XPRIMM Reception is organized with the support of ASTRA Asigurari as Strategic Partner, of OLSA Re as Main Partner and of CERTASIG as Partner. Click here to read more! by andreea.ionete@mxp.ro, 23.09.2010 Mandatory household insurance switch from future to present tense at the VIIth Edition of ICAR Forum Mandatory household insurance in Romania, a project on which there has been done a lot of work in the last 5 years, has finally become a reality. The 2010 edition of ICAR - The International CAtastrophic Risks Forum thus marks a historical moment, the result of an over 8 years road, when it had been debated the first draft on mandatory household insurance. Click here to read more! by andreea.ionete@mxp.ro, 23.09.2010 Apparent slowdown of the decline... The first half of 2010 is still in the red for the Romanian insurance market. With a decrease of 3.88% in euro, the insurance market slightly exceeded EUR 1 billion in the analyzed period. Life insurance increased by 4.3%, while general insurance decreased by 5.6%. Click here to read more! by alex.rosca@mxp.ro, 15.09.2010 PAID is aiming for 250.000 policies by January 15, 2011, and a medium pace of 4,000 policies a day; after two months, only 42,000 contracts were sold After the introduction of the mandatory household insurance, two months ago, only 42,000 policies have been sold, of the 8.3 million homes in Romania, with an average daily rate of 900 policies. Until January 15, 2011, PAID is expecting to have concluded around 250,000 policies, a lot less than the initial estimates of the Pool regarding the penetration level. Click here to read more! by andreea.ionete@mxp.ro, 17.09.2010 What happened on each insurance class in 1H/2010? Underwritings related to general insurance fell in the first 6 months of the year by 5.6% in European currency, to the value of EUR 848 million, representing 81.3% of the total insurance market. Basically, insurers have underwritten on general insurance EUR 50 million less than the value of business registered in the same period of last year. Click here to read more! by alex.rosca@mxp.ro, 20.09.2010 Life insurance increases its market share Life insurance market amounted to a volume of gross written premiums of over EUR 195 million, over EUR 8 million more than the value recorded in the corresponding period of last year. The above-mentioned insurance line grew by 4.3% in European currency. Click here to read more! by alex.rosca@mxp.ro, 23.09.2010 Insurance market drops by 4.5% in the first seven months The months from January to July have witnessed a 4.5% drop in the Romanian insurance companies turnover, as opposed to the similar period of 2009. Therefore, the total underwritings volume rose to RON 5.076 billion, according to the data presented by ISC on September 16, 2010, in a seminary organized by Ziarul Financiar. Click here to read more! by andreea.ionete@mxp.ro, 17.09.2010 PAID reinsurance program fully placed; first payment will be made one month after the first quarter of mandatory policies issuing On the 15th of July, when the mandatory household insurance policies started being issued, the contract of reinsurance was in force and fully placed on the reinsurance market. The conditions are competitive and have been discussed, benefiting PAID, holding into account the particular characteristics of the Romanian catastrophic insurance programs. Therefore, the first payment will be done in one month from the closing of the first quarter of mandatory insurance policies issuing and it is less than other rates, according to Karina ROSU, CEO, AON Romania. Click here to read more! by andreea.ionete@mxp.ro, 17.09.2010 ISC has favorably solved 59% of the first semester complaints During the first semester of this year, Insurance Supervisory Commission has registered a total of 5,028 complaints and intimations from clients belonging to the insurance agencies, out of which 2,960 were favorably resolved. This represents approximately 59% of the total. The number of complaints registered in the first semester of 2010 by the supervisory authority has more that doubled in comparison with the similar time interval of 2009, the evolution reaching a staggering 121.7% increase, as announced by ISC. Click here to read more! by andreea.ionete@mxp.ro, 23.09.2010 F.P.V.S. paid claims have tripled in comparison with last year The amount of claims paid by the Street Victims Protection Fund (F.P.V.S.) after the first eight months of 2010 has reached the value of RON 4.55 million, almost triple that of same period last year, when EUR 1.61 million had been paid. Click here to read more! by mihai.cracea@mxp.ro, 22.09.2010 AXA Group operates the first infusion of capital in its Romanian subsidiary The French group AXA made its first infusion of capital in its company situated on the Romanian profile market, AXA Life Insurance (former OMNIASIG Life), with a value of RON 15 million. Thus, the capital of the newest company on the local life insurance market grew from RON 36 million to RON 51 million, according to the data published in the Official Gazette. Click here to read more! by andreea.ionete@mxp.ro, 21.09.2010 ARDAF Asigurari is an ICAR 2010 Partner With 2,700 sold so far policies of mandatory household insurance against natural disasters, both type A and type B, ARDAF Asigurari is one of the leading actors of this system that finds itself at the beginning of the road in Romania. In this context, ARDAF will attend the 2010 edition of ICAR - The International Catastrophic Risks Forum, as Partner of the event. Click here to read more! by dora.alecu@mxp.ro, 23.09.2010 EUREKO is selling EUROCLINIC; UMC estimates a doubling in turnover within 2 to 3 years from the purchase Financial group EUREKO sold EUROCLINIC Hospital shares to UMC - Unirea Medical Center, medical services provider, according to an announcement made by the company at the end of last week. The transaction's value has yet to be revealed, but sources from the market, quoted by Mediafax, estimate it at around EUR 30 million. Click here to read more! by andreea.ionete@mxp.ro, 21.09.2010 Eugen VOICU buys back the majority stake of AVIVA Investors, sold in 2008 The transaction through which Eugen VOICU, CEO, AVIVA Investors, will buy back from the British group AVIVA the majority stake of the assets administration company, was authorized on the 15th of September 2010 by the National Securities Commission. The sale-purchase transactions, which will be achieved through a management buyout process, will be finished by November 1st, 2010. Click here to read more! by andreea.ionete@mxp.ro, 16.09.2010 |
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| MONTE CARLO Journal |
VIDEO: Rendez-Vous de Septembre
- starting point for the autumn negotiations
VIDEO: Monte Carlo- the reinsurer's battlefield
VIDEO: MUNICH Re - still first in the reinsurance
market
VIDEO: MUNICH Re targets energy giants AON Benfield: Decreasing underwritings for mature insurance markets in 2011 Non-life insurance market in several countries with tradition in this field will be recording a further decline of underwritings in 2011, according to AON Benfield experts, quoted by Insurance Day. This is an unprecedented trend, which manifests itself for the third consecutive year already, believe the AON analysts. "Estimates target the profile markets in Japan, France, Germany, Great Britain and the USA", stated, for the above-mentioned publication, Bryon ERHART, Manager of the Investments and Banking Industry Department, AON Benfield. Click here to read more! by oleg.doronceanu@mxp.ro, 16.09.2010
VIDEO: The demand for reinsurance will rise by
the end of 2010 PARTNER Re: Price increase is not the answer for the time being "The non-life market dropped constantly in the last three years. Prices decreased with each renewal season and now they are below the normal level. The economical perspectives and the reinsurance demand aren't too encouraging either, at least in the West, so a price increase is not the best solution now, even though it is absolutely necessary in certain segments", explained Costas MIRANTHIS, Chief Operating Officer, PARTNER Re. Click here to read more! by mihai.cracea@mxp.ro, 15.09.2010
VIDEO: "A-" for POLISH Re from AM Best COOPER GAY- extending to South America The CEO of COOPER GAY, Tobby ESSER, declared, only a few months away from the SWETT&CRAWFORD fusion, that he is taking into consideration the countries within the South America region. "In terms of acquisitions, we are still an active company and when opportunity presents itself, we will extend", stressed Tobby ESSER. Click here to read more! by mihai.cracea@mxp.ro, 16.09.2010 |
| CEE, RUSSIA&CIS |
XV International AVUS Congress and the 50 years anniversary of AVUS, today, at Hofburg, Vienna The XVth edition of the International AVUS Congress takes place for two days starting today, September 23, at Hofburg Congress center in Vienna. The event also celebrates 50 years of AVUS Group. AVUS Group has been contributing to the development of international cross-boarder claims settlement for more than 50 years in the 60-year history of the Green Card system. Click here to read more! by andreea.ionete@mxp.ro, 23.09.2010 Stagnation for Ukrainian insurers in the first half Insurance companies in Ukraine registered in the first half underwritings worth EUR 954 million, up only 1.3% compared with 1H/2009. Meanwhile, "the volume of net premiums underwritten by Ukrainian insurers fell by 11.5%", said the representative of the insurance supervisory authority of Ukraine at the conference of the International Yalta Forum. Click here to read more! by vlad.panciu@mxp.ro, oleg.doronceanu@mxp.ro, 22.09.2010 Foreign investors - reluctant to the Ukrainian insurance market The weak results registered by the Ukrainian insurers amid the economical crisis determined the foreign investors to postpone their initiatives for the near future. "The arrival of new investors in Ukraine will not happen for at least 2 years", declared Alexandr ZALETOV, Vice President of the Insurers League of Ukraine, at the opening of the International Yalta Forum. The event takes place between the 20th and the 24th of September, with the support of PRIMM Insurance & Pensions Magazine as traditional Media Partner. Click here to read more! by oleg.doronceanu@mxp.ro, 21.09.2010 Athens, 2011: XPRIMM joins MDRT Europe ClassIQ regional meeting as Media Partners MDRT Europe ClassIQ regional meeting, a forum designed for the world's best insurance agents and financial services advisers, is organized by MDRT Europe and will take place on February 2-4 in Athens Greece. XPRIMM Insurance&Pensions support the event as Media Partners. The idea this concept is based on is learning how to be successful in every aspect of your life, because to be professionally successful is not always the same with a successful life. Click here to read more! by dora.alecu@mxp.ro, 23.09.2010 |
| FINANCIAL NEWS |
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BASESCU: Romania needs new IMF loan, long term financing IMF accord, passport to an a-level country rating Romania, Azerbaijan, Georgia and Hungary to own equal shares in AGRI
project E.ON develops three wind farms worth EUR 200 million |
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