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XPRIMM News No. 176, April 7th, 2011


XPRIMM News - The Romanian Insurance Market Newsletter
No. 176, April 7th, 2011
Credit Europe Asigurari

How do we make the economy grow? By encouraging insurance...

The beginning of spring brings, this year, the optimism of analysts, who point out more and more signals for economic revival in Romania. Increasingly optimistic forecasts are making their way on the first page of specialty publications, awaiting estimates of the National Statistics Institute, to officially announce the end of the recession.

Economic development will lead, in 8-10 months, to an increase of the insurance companies business, analysts say. Thus, the positive evolutions of industry, exports, real estate and credits will also be reflected upon the insurance market.
However, most recent studies show this relation could also run backwards. Thus, an increase of 1% of insurance underwriting will result in an increase of 0.5% of GDP.

So, we should not wait for a chain reaction to return to insurance growth, as we can start from this side to stimulate all the economic cycle. In this sense, the state can take proactive measures to stimulate the insurance market, to make the concept of protection more popular, in all citizens’ interest.

And studies show that the effects on the overall economy will soon appear...

For 2011, we have set the objective of a minimum 10% increase in income. On the retail segment, we plan to diversify our products and to re-launch the site, and regarding the corporate segment, we will focus on developing niche areas and on consultancy services.

Managing Partner, ASIGEST

XPRIMM: What are the main challenges that the insurance brokerage market has to face in 2011? How did the perception of clients regarding the insurance consultant's role change in the last year?
Unfortunately, the deep economic crisis in Romania led to minimizing the role of the insurance consultant and turned him into a simple... cheap seller! Very few are still looking at the quality of services, all the insured are now seeking one thing: to pay as less as possible for insurance, regardless of the quality of the product or of related services, such as those of a consultant. Unfortunately, this does not mean less work for the consultant, because his work is the same, established both by the legal regulations, and by the market, because no customer, corporate or retail, requires the cheapest product from the beginning. So, after a deep comparative analysis of insurance products, the customer chooses, during this period, to buy minimal insurance and at the lowest price. Simultaneously, the poverty of the population leads to an explosive evolution of the number of brokers, many of those affected by the financial crisis having to supplement their incomes by also working in insurance, even if the average income per broker is declining dramatically.


IIMC 2011  
IIMC_A4_micVIDEO: The international insurance brokerage market reunited with the occasion of the International Insurance Mediation Conference
The first edition of the International Insurance Mediation Conference, organized by Media XPRIMM and Istanbul Underwriting Center, took place on March 28th-29th of 2011 in Istanbul. The event is the perfect context for worldwide insurance leaders and specialists to meet and debate on the most important issues in their field of activity.

violeta_ciurel_3Violeta CIUREL: Insurers have registered capital increases of EUR 160 billion in 2009-2010
Insurance companies have learned some lessons from the financial crisis that began in 2008. Thus, "it is extremely important to rethink the strategies of insurance companies, in terms of granting special attention to indicators of liquidity and to solvency margins", is one conclusion of the presentation held with the occasion of IIMC 2011 by Violeta CIUREL, President of AXA Life Insurance Romania, the moderator of the first part of the conference.
Also, an important role should be occupied by maintaining the portfolio and by granting special attention to communication with clients.

p_5468VIDEO: Menekse UKAROGLU: Trainings and conferences add a lot of strength to the market
"We value XPRIMM and the whole team and I sincerely believe that such an effort to organize conferences and trainings and such media work are adding a lot to the strength of the market", said Menekse UKAROGLU, General Manager, Istanbul Underwriting Center in an interview for XPRIMM TV, regarding the IIMC - the International Insurance Mediation Conference, held on March 28th - 29th, 2011, in Turkey. The first edition of the event was co-organized by Media XPRIMM and Istanbul Underwriting Center, who brought a great valuable support.

p_5462VIDEO: A 1% increase in the insurance industry leads to a 0.5% increase of GDP
Economy and insurance industry are in a relationship of mutual influence, bidirectional, a negative or positive evolution of one of them having an effect upon the other. This is one conclusion of the presentation of Prof. Fuat ERDAL, Director, The Insurance Training Center, held during IIMC - The International Insurance Mediation Conference, that took place on the 28th and on the 29th of March, in Istanbul.

bogdan_andriescu9Brokers have survived the crisis and have adapted to current market conditions by focusing on retail and on non-motor lines
"In 2010, the brokerage market maintained at the 2009 level, of EUR 758 million, as the negative effects of the financial crisis where mostly felt by insurance companies", said Bogdan ANDRIESCU, President of UNSICAR, during the IIMC 2011 conference, in Istanbul. However, "despite prolonged unfavorable economic conditions and decreasing business registered by a significant number of players in the insurance market, the degree of coverage of the brokerage market in total underwritings reached 38%, which is superior to that recorded before the crisis, of 30%, in 2008", emphasized the President of the professional association of insurance brokers in Romania.

p_5466VIDEO: CERTASIG presented, during IIMC 2011, the strategy of collaboration with Turkish brokers on the marine insurance line
CERTASIG participated, as Main Partner, in the first edition of the International Insurance Mediation Conference, that took place on the 28th-29th of March, 2011, in Istanbul. During the event, James GRINDLEY, CEO of CERTASIG, presented the company's strategy regarding the collaboration with insurance brokers in Turkey, with particular focus on marine insurance line.

dieter_pscheidlIMD 2 aims to create a unique market and an equitable business environment for insurance brokers
The amendment of the Insurance Mediation Directive (IMD1), operation launched in the summer of 2010 at European Union level, aims to create a unique market for insurance brokers and an equitable business environment for insurance distribution, in a better integrated market, with an optimal level of consumer's protection. This was the main topic discussed at the IIMC - International Insurance Mediation Conference on March 28-29 in Istanbul.
All aspects that resulted from the experience of IMD1 implementation have been the object of a consultation launched in January 2010 by the European Commission.

p_5469VIDEO: Mick McATEER: Robust regulation of brokers business will work in favor of both customers and the insurance industry
"Changing social, economic and financial environment in EU represents great challenges and opportunities for insurers - if 'fit for purpose'. Serious and serial insurance market failures in many countries highlighted that a new, coherent and consistent approach to regulation is needed, a regulation that delivers real benefits for consumers, industry and society", said Mick McATEER, Director, The Financial Inclusion Centre and President, European Commission Financial Services User Group, during the first edition of the International Insurance Mediation Conference.

jetse_frederik_de_vriesTurkey: Demand for life insurance products is increasing
Once the financial crisis ended, the demand for life insurance products increased in 2010, compared to 2009, showed Jetse Frederik de VRIES, CEO, ING Emeklilik, during IIMC 2011 Conference, that took place in Istanbul, on the 28th and on the 29th of March, 2011. At the same time, compared to 2001, the gross written premiums on life insurance segment had an exponential growth in Turkey, from USD 375 million in 2001 to USD 1,447 million in 2010.
In terms of distribution channels for life insurance policies, under the circumstances of extended banking networks, bancassurance holds 70% of total sales, followed by direct sales, with 11% - this form of commercializing being supported by sales teams specialized on corporate clients, by call centers and by online marketing.
oracle_180ORACLE hosted ORACLE Insurance Day on 7th of April
On the 7th of April, the second day of the event ORACLE Financial Services Days, called ORACLE Insurance Day, took place. Important leaders and specialists from the insurance market came to the Romanian Banking Institute to learn more about how ORACLE solutions can help them in business management.

gppa_2011Insurance Market Awards Gala in 300 photos
The photo gallery made after the Insurance Market Awards Gala, granted by PRIMM - Insurance & Pensions Magazine, is available for viewing here!
Also, an extensive selection of photos taken at the event is posted on and
The best Romanian insurance companies and their local networks were granted awards during a ceremony held Monday, March the 21st, at Hotel RADISSON.

theodor_alexandrescu_6Theodor ALEXANDRESCU, the new President of LIMRA Romania
Theodor ALEXANDRESCU, General Manager of ALICO Asigurari, was appointed President of the Romanian Board of LIMRA, for a two years mandate, starting immediately. The Presidency of the Romanian Board of LIMRA also involves the quality of Member in the European Executive Board.
LIMRA, LL Global affiliate member, is an association of life insurance and financial services companies with approximately 850 members, in over 73 countries worldwide. The association's objective is to offer the most recent information about the industry and recommendations to meet the needs of the financial industry.

guy_hudson1JLT Re strengthens CEE practice with WILLIS Re's Guy HUDSON and Russel HENWOOD
JLT Reinsurance Brokers Limited (JLT Re) has expanded its existing capabilities in Central and Eastern Europe through the appointments of Guy HUDSON as Partner and Russell HENWOOD as Associate. JLT has taken the two Central and Eastern European reinsurance specialists from rival WILLIS's reinsurance division.
Guy HUDSON's experience in the industry stretches back over twenty years. His previous appointments include JAUCH & HUEBNER where he held the position of Director, followed by HEATH Lambert and later WILLIS where he was Executive Director, responsible for producing and placing reinsurance programmes on behalf of Central and Eastern European insurers. Guy is a Fellow of the Chartered Insurance Institute.

rangam_bir2ALLIANZ: Economic Growth a Major Factor for Increased Losses; the tendency is maintaining in Romania as well, where insurance penetration is still very low
A study made by experts on natural catastrophe risk at ALLIANZ points out that the "average annual cost of insured claims from natural catastrophes has increased eight-fold since 1970 (up from some USD 5 billion in the 1970s and 1980s to over USD 40 billion in 2010)." The main reason for the steep increase hasn't been the nature of the catastrophes. It's been caused by economic growth. Specifically: "property values are rising, population density and insurance penetration are increasing, often in high risk areas - a trend that is compounded by the fast growth of some Asian economies in catastrophe-prone regions," ALLIANZ explained. "Most of such tendencies have manifested in Romania as well, in the last 20 years", stated Rangam BIR, CEO ALLIANZ-TIRIAC.

bani53The shareholders have brought EUR 107 million to the capital of Romanian insurers in 2010, compared to EUR 384 million in 2009
Romanian insurers' shareholders have made capital increases of EUR 107.5 million in 2010, 72% less compared to the capitalizations of EUR 384 million made in 2009, according to data published by the National Trade Register Office (ONRC).

General insurance brokerage market: growth sustained by mandatory policies
General insurance accounted for over 95% of the total brokerage market - according to estimates, EUR 759 million. The best represented insurance class was motor insurance, as Motor Hull and MTPL policies generated, cumulated, EUR 631 million (equivalent to 79% of the total market). The rest of the brokerage market portfolio was completed by property insurance (10%), respectively by GTPL policies - 2.5%.
Change of leader on the life insurance brokerage market
EUR 41 million was the value of the mediated premiums on the life insurance segment in 2010, registering an increase in absolute value of around EUR 18 million. Also, the share in the total market, according to estimates, has increased from 3 percent in 2009 to over 5% at the end of 2010. Compared with 2009, the hierarchy of the brokerage companies has known changes, as KUNDEN Broker became the market leader, with a 16% share and a 42% business increase.
Profit of EUR 28.5 million for VIG in Romania
VIENNA Insurance Group registered, in Romania, in 2010, a profit (before taxes) of EUR 28.5 million. This value represents an increase of 17.9% compared with 2009 results.
GENERALI Asigurari increased by 8% on the life segment in 2010
GENERALI Asigurari registered in 2010 underwritings worth EUR 91 million on the life insurance segment, up by 8% compared to 2009, due to a 19% evolution of the unit-linked segment.
Romanian insurers have underwriten RON 78 million outside the country in 2010
RON 78 million represents the total gross premiums underwriten in 2010 by Romanian companies outside the country. The figure represents about 0.9% of the total insurance market and was made by three insurance companies: CITY Insurance (RON 55 million), ASITO KAPITAL (RON 22.6 million) and CREDIT EUROPE Asigurari (RON 0.5 million).
3-5% increase for life insurance in 2011
The companies activating on the life insurance segment have registered, in 2010, a 3% increase of business, up to over EUR 388 million. One of the main ways through which this increase has been obtained is represented by the focus on retention mechanisms, according to Ovidiu RACOVEANU, Life Insurance Manager, GENERALI Asigurari.
VIENNA Insurance is making its exit from the Russian insurance market
VIENNA Insurance Group (VIG) is selling its stake in the Russian group KAPITAL Insurance Group, composed by MSK Insurance, MSK Life and SOVITA, thus making its exit from the Russian insurance market.
Bulgaria: 87% of claims paid on Motor Hull were the result of road accidents
Traffic accidents and vehicles hit in the parking lot were the causes for 53.3%, respectively 34% of the total claims paid by Bulgarian insurers the previous year, on the Motor Hull insurance line, according to data published by the Financial Supervisory Commission.
4% increase for the Kazakhstan insurers in the first two months of 2011
EUR 155 million was the total registered by the insurance market in Kazakhstan, during January-February of the current year, 4% higher than in the similar period of 2010. At the same time, the paid claims of the insurers rose to EUR 25.68 million (+39.5%), according to data published by the Financial Supervisory Commission.
Croatian insurance market grew by 2% in the first two months of 2011
According to the preliminary data published by the Insurance Bureau in Croatia, in the first two months of the current year the insurance market recorded a gross written premium's volume of KN 1.66 billion (about EUR 225.06 million), 2.1% higher than in the same period of last year.
Commerce turnover up in February against January, INS reveals
The turnover of the retail trade sector - except for the sales of road vehicles and motorcycles - in February increased by up to 5.4 pc against January, but dropped by as much as 5.2 pc vs. the same month of 2010, according to data provided by the National Statistics Institute (INS).

Industrial prices up 10.9 pc in february
Industrial production prices for total (local and foreign) markets picked up 10.9 pc in February against the same month of 2010, according to data provided by the National Statistics Institute (INS). Per activity sector, prices went up in the processing industry (+12.9 pc), the mining industry (+8.6 pc), the supply of water, electricity, thermal energy, gas, hot water and air conditioned (+1.4 pc).
Domestic market has a high growth potential as cards penetration
Considering the international economic and financial context, 2009 and 2010 were marked by a moderation of the banking activity in Romania, as reflected by the evolution of total banking assets, reveals ENSIGHT report remitted to Nine O'Clock. Non-government loans' (households and non-bank companies) high growth pace until 2008 was replaced by a contraction in 2009 and 2010, in real terms.
Over 10,000 homes available at tIMOn, between April 14th and April 17th
Over 10,000 homes, old and new, will be on sale in the tIMOn real-estate fair, to take place between April 14th and April 17th, in the Constitution Square, the organizers announced, in a press release, quoted by Mediafax. Over 100 companies, namely 50 real-estate brokers, confirmed their participation in the fair, on a surface of 2,000 square metres.

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, Olesea SERGHIESCU

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



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