XPRIMM News No. 167, November 4th, 2010

We are going global

Monte Carlo, Baden-Baden, London, Frankfurt, Amsterdam, Bruxelles, Vienna, Prague, Istanbul, Chisinau - not to mention Moscow, Yalta and Tashkent - this are just a few international business hubs reached by the distribution area of PRIMM Magazine SPECIAL REPORT "CEE, RUSSIA & CIS Insurance Markets" survey.

Besides the ever growing circulation, the report offers a detailed overview of the industry, including relevant data on business lines, a comprehensive analysis of 8 CIS markets and a broad perspective on all major European insurance groups.

So now, at its 3rd Edition, the SPECIAL REPORT reaches its main objective in full, bringing together the global insurance and reinsurance markets. And where else its release would have suited better than at The Annual Baden Baden Meetings?

Alexandru D. CIUNCAN
Business Development Director
Media XPRIMM

P.S.: As for the entire 2010 results, let's just say that all FIAR - the International Insurance - Reinsurance Forum participants will have a special surprise.

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Interview with
Aurica DOINA, Vicepresident, National Commission of the Financial Market (NCFM)
Vladimir STIRBU, Insurance Department Director, NCFM

XPRIMM: How does, at this point, the insurance market in the Republic of Moldova present itself?
Vladimir STIRBU: The insurance market in Moldova, like those in the region, knows a growth, but not a very fast one; in addition, the impact of the crisis is obviously felt here, too. However, according to preliminary data for the first nine months of 2010, compared to the same period in 2009, we see an 8% increase in gross written premiums volume. This is not necessarily favorable, as growth in the first quarter reached 15%, and currently we expect, in the last quarter of the year, to recover losses from the third quarter.

XPRIMM: Can we say that Moldova has not suffered so much due to the crisis compared to other countries?
Vladimir STIRBU: We have not suffered in terms of the emergence of negative figures, but the effects are felt, as we initially expected a higher growth in terms of quality. The crisis manifested itself in the form of a slowdown, which for us is still a negative thing.

XPRIMM: What did the National Commission of the Financial Market do to improve the legal framework of insurance?
Aurica DOINA: The financial market reform policy includes measures such as harmonization of legal framework with EU directives, the transition to a transparent, efficient and reliable market and, no less importantly, to restore public confidence in insurance products and, in general, in the non-banking financial products.
In the context of regulations and laws, I must mention that we already have results that were reflected on the local profile market. Here we can talk about the new requirements and limitations in terms of share capital, we can talk about new institutions - such as insurance brokers. Another aspect would be that we are expecting the results of the regulations related to the creation of the legal framework regarding the Street Victims Protection Fund, the compensation fund.
Other measures that will be implemented will reffer to tougher rules for the financial safety of insurance companies. I would underline here that all we have obtained until now was based on values such as commitment and support of colleagues in the market and of our development partners. The context of today must also be mentioned, which I think is a success, because it brought together at the dialogue table both colleagues in the market, as well as leading international experts, who come with their own points of view from their practical experience.

Vladimir STIRBU: Legislation and regulations in the insurance field are now among the main concerns of NCFM. In this chapter we have a slight "delay", but we are now catching up with rapid steps, with support from development partners of the Commission, especially with World Bank support. Through the project financed by this partner, we have now 13 regulations in the final stage. The purpose of these regulations is to align to the EU legislative framework. I hope to succeed in a short time, preferably by mid next year, to finalize all the projects started. The main elements to be introduced until the end of this year are the rules of prudence, extremely necessary, related to solvency and technical provisions, the manner of their calculation. We are reorienting the market towards new assets, to cover technical reserves, and towards solvency, which will allow to maintain the insurer's financial stability.

XPRIMM: How open do you consider the Moldavian insurance market is to foreign investments?
Aurica DOINA: In the Republic of Moldova, we have a favorable, non-discriminatory legal framework and there are plenty of tax instruments that could attract investors' attention. The market is open to foreign investors initiatives and we are expecting them, as a result of the ongoing reforms.

XPRIMM: What do you think is the biggest problem for the insurance market of Moldova and what does the Commission do in this respect?
Aurica DOINA: I think the most striking problem (actually, not so much a problem, as a deterrent factor) is the lack of trust of the population in insurance instruments. They are seen as an extra expense. It is necessary to inform the population in order for the advantages of insurance protection systems to be known. Obviously, the profile industry has the main role, that of solving any problem that citizens could have.
As for regulations, there are no problems, meaning that the insurance industry can face the challenges. I realize that they are complex, and from the experience of other countries we know that new challenges will continue to appear, but we, along with colleagues from the market and our development partners, will try to deal with them.

Vladimir STIRBU: There are situations that are not finalized - including the already mentioned legal framework. Also, I believe that investments in insurance, including new technologies, remain a problem for us. But we hope that, over time, and also with the help of the event organized by Media XPRIMM, we will succeed in our attempt to promote insurance market in Moldova, so that we are known and recognized abroad, and investments will come soon. I think this will ensure a competitive environment and a legal framework to match it.

by vlad.panciu@mxp.ro,
andreea.state@mxp.ro

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Aurica DOINA
Vicepresident, National Commission of the Financial Market (NCFM) Republic of Moldova


Vladimir STIRBU
Insurance Department Director, National Commission of the Financial Market (NCFM)
Republic of Moldova

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VIDEO: The Baden-Baden Interviews
Over 2,000 leaders and specialists, representing the most important insurance and reinsurance worldwide companies, international journalists and consultants participated at the 2010 Edition of Baden - Baden Meetings between insurers, reinsurers and brokers.
Click here to read more!

Click here for video!

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Jeffrey FRANKS: I had intense and tough discussions in Bucharest; We consider that Romania will register economic growth in 2011
IMF Romania chief of mission, Jeffrey FRANKS, declared on Saturday, the 31st of October 2010, that representatives of the international financial institution informed the President about the existent options and the necessary actions to move on, mentioning that Romania will register economic growth in 2011, Romanian news agency Mediafax informs. "We had several tough and intense talks in Bucharest, but there is a good collaboration with Romanian authorities and we will get to an understandng", IMF official declared.
Here are his most important declarations
- "We had a series of intense and tough discussions and I believe we will get to an agreement";
- "There were quite a few challenges in Romania in the last several months but steps to move on were made. We have a very good collaboration with the National Bank, the Finance Ministry and many ministers involved in talks";
- "We talked with the President and informed him about the talks so far, the options ahead and the actions to be taken in order to move on";
- "We believe that Romania's growth will be positive next year".
by hotnews.ro, 1.11.2010

PwC: Romania to come out of recession in 2011
According to PRICEWATERHOUSECOOPERS (PwC) analysts, Romania's economy will come out of recession in 2011 when it will report a 1.6 percent growth, their prognosis being in line with official estimates. Nevertheless, according to them the annual inflation rate will stand at 5.4 percent, surpassing by far the 3 percent target set by BNR, a communiqué remitted to the editorial office shows. PwC's estimates are part of a report showing that the world's economic growth continues to rest on the shoulders of emergent economies while many of the developed economies are facing high unemployment rates and a drop in consumer demand. At global level, PwC forecasts an economic growth of 3.5 percent this year and 3.1 percent in 2011. Likewise, the study shows that India and China will continue their impressive growth rhythms in 2010 and 2011. China's economic growth is forecast at 9.6 percent this year and 9.3 percent next year, while India will report an estimated growth of 8.6 percent this year and 8.5 percent in 2011. Germany's economic growth is forecast at 3.3 percent this year, more than twice the Euro Area's overall economic growth. At the same time, the American economy will return to an upward trend despite the high unemployment level and the fears concerning a deflationary process. "Consumers are feeling the recession's side-effects, with all polls dealing with confidence in the economy revealing the consumer's fears. In the US, for example, a persistently high unemployment rate (of over 9 percent) combined with low prices in the real-estate sector and with fiscal policy uncertainty maintains pessimism in what concerns the economic outlook", Yael SELFIN, leader of PwC's macro-economy group, stated in the communiqué.
04.11.2010

ORANGE Romania: RON 3 million-project to enhance the employees' skills
SC ORANGE Romania SA will implement, by the end of June 2011, a project to enhance the skills of 450 employees, worth a total of RON 3.050 million, 60 percent of which (RON 1.830 million) will be covered out of non-reimbursable European funds, according to a release sent to Nine O'Clock. The main target of the project is ensuring a higher competence level for the top specialists in SC ORANGE Romania SA, enhancing their potential to accede to more complex future positions.
by nineoclock, 01.11.2010

ING: Central Bank sets ambitious inflation target
BNR has set new and ambitious inflation targets starting with 2012 only in order to give positive signals, ING Bank Romania analysts claim. In their opinion, the Central Bank will not harden its monetary policy in order to attain them, something that will lead to new failures to attain the targets, Mediafax informs. The National Bank of Romania's Administrative Board has decided that the inflation rate target for 2012 will be maintained at its 2011 level of 3 percent (plus/minus one percentage point) and has adopted a stationary target of 2.5 percent (plus/minus one percent) for 2013.
ING analysts however note that the Central Bank continues to state that the inflation rate will be low but usually the annual inflation rate surpasses by far BNR's estimates and the targets it sets. BNR failed to attain the inflation targets set in the last three years and it estimates that the annual inflation rate will surpass the target at the end of this year too, as a consequence of the 5 percent VAT hike implemented in July. "It's hard to believe that the inflation rate will be so low against the backdrop in which the economy continues to have to go through structural adjustments, many of which entail higher prices", the ING report adds. The bank's analysts consider that it is expected for the prices of natural gas, which are far below the EU average, of cigarettes, of district heating and of electricity to grow in the future. Moreover, the ING specialists point out that BNR will not allow the RON to appreciate as happened in 2007.
by nineoclock, 03.11.2010

Outstanding loans up 9 pc in September
The amount of loan arrears rose 9 percent in September to RON 15.66 billion, or 7.47 percent of overall loans, according to data published by the National Bank of Romania and reproduced by Mediafax. Hard loan arrears accounted for 6.36 percent of the total hard loans, nearly 1 percent up from the 5.57 percent in late August. The proportion of outstanding hard loans stood at 3.04 percent early this year. Outstanding RON loans too began to climb in September, yet not so steep, by 3.5 percent, to RON 7.31 billion. RON loan arrears account for 9.36 percent of the overall RON credits, up from 9 percent in August. The highest proportion of late September overdue loan, over 10 percent, were reported in the counties of Arad, 10.45, Bistrita-Nasaud, 12.1 percent, Galati, 12.1 percent, Ialomita, 11.6 percent, and Suceava, 10.6 percent. In Bucharest, they equalled 6.36 percent of all the loans, which totalled RON 209.4 billion in late September, an amount slightly similar to that posted at the end of August, RON 209.12 billion. At the end of 2009, they accounted for 5.6 percent of the overall RON loans.
by nineoclock, 28.10.2010

Romania, among Europe's most receptive to ORACLE products
The ORACLE Company has completed this year its takeover of SUN Microsystems, providing a range of products covering the company hardware segment, technology, middleware and business applications. A good portion of the new product line, including the SUN portfolio, presented at the annual conference ORACLE Open World in San Francisco, last September, has been, or is going to be implemented in Romania too.
"I'm pleasantly surprised at the way the Romanian market answered these new challenges in the field, given this difficult economic moment. We are content with the degree of adaptability and adjustment here and I should like to say this is a good market compared to others in Europe", Sorin MINDRUTESCU, CEO of ORACLE Romania, the local subsidiary of the world's largest manufacturer of business software, told a press conference on ORACLE Day Romania 2010.
Among the new oracle applications, ORACLE Fusion Applications, with a range of over 100 modules from seven different product families aimed at various domains, including financial management, supply and suppliers, human capital management. ORACLE Exalogic Elastic Cloud is the first middleware integrated solution offering a comprehensive cloud application infrastructure, Java and non-Java application. In the Exadata Database Machine X2-8 department, the latest and most successful ORACLE new line of products, Romania is, alongside Turkey, among the most receptive markets.
On the other hand, ORACLE has agreed on the 2nd of November to buy e-commerce company ART Technology Group for about USD 1 billion, in a move designed to expand the range of services the business software giant can offer its customers.
by nineoclock, 04.11.2010

NEW KOPEL brings the CHERY automobile to Romania
Israeli automotive company NEW KOPEL Group will launch the CHERY automobile on the Romanian market in the first half of next year, with 24 units of the Chinese brand already undergoing tests in the company fleet. According to Mediafax, NEW KOPEL Group, which also deals in car rentals and leasing, will sell the Chinese brand through its car sales subsidiary UNION MOTORS, a dealer of the SUZUKI and OPEL brands. "As far as prices are concerned, we can say these won't be under those of DACIA, but they won't be very far from these either", company CEO, Dudy PERRY, stated, during the opening event of UNION MOTORS' first OPEL showroom. UNION MOTORS inaugurated, on the 27th of October 2010, its first OPEL showrooom since it became partner of the German brand. The showroom was constructed on the Bucharest-Ploiesti motorway, upon a total investment of EUR 6 million.
by nineoclock, 28.10.2010

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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
Junior Editor: Dora ALECU

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

e-mail: xprimm@primm.ro

PUBLISHED BY: Media XPRIMM

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