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XPRIMM News No. 177, April 21st, 2011


XPRIMM News - The Romanian Insurance Market Newsletter
No. 177, April 21st, 2011
FIAR 2011

Romanians and the sense of ownership

Romanian's mentality makes him want to be owner, and not tenant... He has the sense of ownership... According to an EUROSTAT report, 96% of Romanians live in houses owned by them, while the average at European Community level is 65%.

However, Romania shocks with an extremely modest value of an indicator that should be somewhat proportional to the above-mentioned one. Thus, only a little over 15% of the houses are insured.

What are the possible explanations for this phenomenon? First of all, the "nothing can happen to me" principle. Although the press shows us almost daily desperate people, often left with no place to live in, left at the authorities' mercy, the majority still thinks they are protected from harm.

Moreover, after the floods that affected Romania in recent years or after the extremely violent earthquakes this year, such as those from New Zealand and Japan, who have reminded us of the traumatic scenes in 1977, profile companies did not notice significant increases in demand for insurance.

What should be done? Romanians should understand that "having a sense of ownership" does not mean only to own a house, but also implies taking care of it. And one of the easiest and cheapest measures that can be taken in this regard is buying a household insurance policy...

Only when the two percentages will equalize, will Romanians be able to say they have a sense of ownership...

The main trends on the motor class, insurance and the difficult economic context, the main objectives and motivations of the merger between GENERALI Asigurari and ARDAF, but also the details of the development strategy of GENERALI Group in Romania are only some of the topics we invite you to read about, in an interview with:

General Manager, Responsible for GENERALI group's operations in Romania, GENERALI Romania

XPRIMM: How was insurance affected by the difficult economic context? What consequences are we talking about and when do you estimate a revival of this market?
Clearly, the economic context has strongly affected the insurance market in Romania, considering that this field depends on a number of other sectors (banking, real estate, auto, constructions) where decline has been fully felt. Overall state of the economy and the insurance industry are in a relationship of permanent dependency - a negative or positive development of the economic environment will certainly influence the insurance market.
On the other hand, lower living standards, rising unemployment or tougher credit conditions, amplified by a lack of confidence in economic recovery, have strongly affected the retail segment. Already bought insurance has been wrongly perceived as sure source of liquidities, clients surrendering policies before maturity. Furthermore, the decision of buying new insurance has been postponed indefinitely. In more developed countries of Western Europe, such as for example France, Germany or Italy, we have witnessed a totally opposite phenomenon - the insurance market increased during the crisis, because people have become aware of the safety that insurance offers.
Going back to local level, in Romania, the consequences of the crisis were felt in the figures reported by insurers. After the spectacular double-digit annual increases, the Romanian insurance market declined by around 1% in 2009 and by 5.7% in 2010.
Making an analysis of the last years and taking into account current economic data, as well as forecasts of financial specialists, we can estimate a one-figure decrease of insurance business for the current year and a slight increase during 2012-2015.


Credit Europe Asigurari
florina_vizinteanu_4Plus 39.5% for the profit of BCR Asigurari de Viata, with business increasing by 20.5%
BCR Asigurari de Viata VIENNA Insurance Group ended 2010 with a 39.5% increase in gross profit, up to RON 18.7 million, while the company's business registered a 20.5% advance compared to 2009, to RON 307.3 million.
"The results reported at the end of last year maintain us on the predicted trend of business development, strengthening two important positions that we have on the insurance market after only five years of activity: number 1 on bancassurance, thanks to excellent collaboration and partnership with BCR, and number 2 in life insurance industry", said Florina VIZINTEANU, President of the Directorate, BCR Asigurari de Viata.

mihai-tecau-1BCR Asigurari: Profit of over RON 14.4 million in 2010
BCR Asigurari VIG registered in 2010 a RON 14.43 million profit, according to IFRS. This figure comes as a result of implementation, over the past year, of a strategy to streamline back office and claims solving activities, as well as of optimization of the administrative and acquisitions costs control process. These measures have resulted in increased efficiency and better cost control, despite the difficult economic environment.
Meanwhile, BCR Asigurari underwrote in 2010 a gross premiums volume of over RON 522 million (about EUR 125 million), according to IFRS, 9% less than the 2009 result, strengthening its fifth position in the top of general insurance companies.

boris_schneider_1ASIROM estimates doubling gross profit in 2011
ASIROM, company member of VIENNA Insurance Group, estimates for this year a doubling of gross profit, compared with 2010, when it had been RON 19.5 million (EUR 4.6 million), and recovery of market shares, both on general and life insurance, lost in previous years. ASIROM also aims a 21.5% increase of incomes from gross written premiums, which in 2010 fell to RON 531 million, from RON 646 million, as the company had registered a year before.
"Our estimates are based on the signals received from the market, which indicate an improved situation compared to previous years. Romanians understood how important it is to insure their future and health, so we expect that in coming years the significant increase will come from private life insurance, pensions and health insurance. This is a perfectly normal trend for a market that is becoming more mature and for Romania's economic level. ASIROM has diversified its product portfolio in recent years, to meet these trends and demands, and we will continue to do that, in order to be able to offer our clients the policy that they want and that will bring them long term benefits", said Boris SCHNEIDER, President of the Directorate, ASIROM.

generali4The motor segment decreased to 50% in the GENERALI portfolio. The insurer aims to further develop other business lines
Motor insurance market will continue the same downward trend, being closely related with clients giving up their voluntary motor policies, according to estimates of GENERALI Romania. In accordance with the specialists opinion, the company expects for 2011 a drop between 5% and 10% of the whole motor business line, particularly influenced by Motor Hull insurance. Instead, "the decreasing share of the motor segment, driven by increasing sales of other insurance lines, represents a key measure for a mature insurance market", according to the General Manager of GENERALI Romania, Marie KOVAROVA.

bani50Four EEA insurers have underwritten EUR 11.3 million in Romania in 2010
In 2010, four insurance companies from the European Economic Area have underwritten in Romania a total volume of about EUR 11.3 million, according to the Specialty Review INSURANCE Profile.
Launched in autumn 2009, CIG Pannonia Asigurari de Viata registered, in the first year of activity, gross written premiums of EUR 1 million, the company having the portfolio formed mostly of unit-linked policies.

GENERALI Asigurari paid the biggest claim in the history of the Romanian insurance market: RON 55.25 million
GENERALI Asigurari announced on the 18th of April that it paid the biggest claim in the history of the Romanian insurance market, amounting to RON 55.25 million, resulting from the fire at Red Dragon commercial complex in May 2010. Also, the company paid claims in the amount of EUR 100,000 to tenants in the complex owned by NIRO Investment.
UNIQA insures JW Marriott Bucharest Grand Hotel
UNIQA Asigurari and the hotel companies group S.C.H. Grand, including JW Marriott Bucharest Grand Hotel, have announced a partnership through which UNIQA will insure GRAND Complex, offering a complete coverage of risks."We are delighted to collaborate with UNIQA Asigurari, because it offers us exactly the insurance products we need to feel safe, both us and our customers", said Gregor AUFHAUSER, CEO of S.C.H. Grand.
Which insurers did the top brokers collaborate with last year?
The leader of the Romanian brokerage market, the "motor" dealer PORSCHE, has mediated, in 2010, a volume of premiums of over EUR 59 million, of which about 32% were made through the company ALLIANZ-TIRIAC.
EXIMASIG Romania has expanded its business on 6 new insurance classes
The Insurance Reinsurance Company EXIM Romania (EXIMASIG Romania), whose majority shareholder is EximBank, has received approval from ISC for activating on six new insurance classes.
Three companies own 99% of the credit insurance market
With underwritings of EUR 15 million, GROUPAMA Asigurari was, at the end of 2010, on the first place in the ranking of the credit insurance segment. The company has registered a 109% nominal increase in EUR, doubling its market share compared to 2009.
Warranties insurance represents about 1% of the market
In 2010, warranties insurance segment generated a volume of gross written premiums of EUR 15.5 million (0.8% of the total insurance market), shows INSURANCE Profile, registering an increasing trend of 118.5% compared to 2009.
Insurance penetration degree has decreased, amid superior evolution of the economy
After 2009 ended with a negative result for the Moldavian insurance industry, in 2010, the profile market ended in the black. Thus, the underwritings volume of the 24 active insurers from the Republic of Moldova exceeded by EUR 3.4 million the 2009 level and by about EUR 1.3 million the 2008 value.

conf_chisinau3IT system and bonus-malus - the challenges of 2011 for Moldavian insurers
One of the great challenges of the current year for the supervisory authority in Chisinau is the implementation of the IT system for Mandatory MTPL insurance policies, "system to be implemented all throughout Moldova. Also, all profile companies that will issue these types of insurance will be forced to comply with requirements set by legislation", said Aurica DOINA, Vice President of NCFM, during the Seminar "Motor Insurance in Times of Crisis", that took place on April 11th in Chisinau.

p_5581VIDEO: UNITY Re: Promoting the interaction between the CIS insurance markets has favorably influenced the development of the profile industry
"Due to the globalization process, insurance companies from CIS have been forced to expand their business in other markets, from other countries, thus creating additional sources of underwriting and reducing risks of concentrating business in one region, stabilizing insurer's activity", stated Igor SHEKHOTOVTSOV, Development Manager, UNITY Re, during the seminar "Motor insurance during crisis", that took place in Chisinau, on April the 11th, 2011.

MOLDASIG: Electronic policies issuing system will increase underwritings and capitalization of companies
The electronic issuing system for mandatory motor insurance will be beneficial for the entire insurance market in the Republic of Moldova, considers Lilia TURCAN, Head of Insurance Department, MOLDASIG, the leader company of the profile market.
Leasing companies recommend to insurers diversification of products and faster payment of claims
For a more efficient development of the Moldavian insurance market, "profile companies should reduce the time of claims payment and should have a greater diversification of the offer of products", pointed out Cornelia COZLOVSCHI, General Manager, RAIFFEISEN Leasing Moldova.
p_5648Check out the interviews with participants of the International Insurance Forum in Tashkent, on XPRIMM TV
The Fourth Edition of the International Insurance Forum in Central Asia took place this year during April the 14th - April the 17th, in Tashkent, Uzbekistan, representing an effective platform for interactive discussions and for exchange of experience between specialists in the field. Over 200 representatives of insurance and reinsurance companies, brokers and consultants from 20 countries, including Austria, Great Britain, Belarus, Germany, Kazakhstan, Russia, Turkey, Ukraine, France, took part in the conference, thus confirming the interest of foreign investors in the potential of the insurance market in Central Asia countries.

p_5637VIDEO: In Ukraine, insurance increased by 10.7% in 2010
In 2010, insurance companies in Ukraine have underwriten premiums of over UAH 22.6 billion - EUR 1.97 billion, up by 10.7% compared to 2009. At the same time, the claims paid by the active players on the Ukrainian market stood at UAH 6.1 billion - EUR 531.8 million. This figure represents a decrease of 9.4% compared to the results registered in 2009, according to data presented by Alexander FILONIUK, President of the Council, Ukrainian Insurers League, during the Fourth Edition of the International Insurance Forum, held in Tashkent, Uzbekistan.

p_5649VIDEO: Uzbek insurance market grew by 20% in 2010
The insurance companies of Uzbekistan have underwritten, in 2010, premiums of over SUMM 175 billion (EUR 72.7 million) worth, up 20% from 2009. "This growth comes under the circumstances of the national economy's overall evolution and of the great potential the local market has", said Olimjon IKRAMOV, Chief of the Insurance Supervision Inspectorate, in the opening of the International Insurance Forum in Uzbekistan.

conf_uzbekistan2Romeo JANTEA: Bancassurance will increase its share in Middle Asia
Special characteristics and development patterns of the bancassurance segment in Central and Eastern Europe and in Romania, in particular, have been presented by Romeo JANTEA, Managing Partner of Insurance Training & Consulting, during the Fourth Edition of the International Insurance Forum, organized in the period 14th-17th of April, 2011, in Tashkent, Uzbekistan.
allianz_rosnoRussia: The underwritings of ALLIANZ Rosno Life rose by 83% in 2010
The company ALLIANZ Rosno Life registered in 2010 gross written premiums of EUR 32.74 million, 83% more than in the same period of 2009, paid claims of the insurer reaching EUR 4.39 million.

KD-logoBulgaria: KD Life becomes JZK Salgasie
The life insurance company KD Life from Bulgaria, part of the Slovenian financial group KD, one of the largest companies of financial services in Central and Eastern Europe, has changed its name to JZK Saglasie. This name change comes after, at the end of December 2010, the whole pack of shares of KD Life was bought by FINANCE Consulting.
sageata_sus2Romanian economy's outlook, one of the best in CEE
According to an opinion poll conducted by the ZEW Institute in collaboration with ERSTE Group, the financial analysts' perception of the Romanian economy's evolution in the next six months has improved in April, becoming the best in Central and Eastern Europe (CEE), Mediafax informs. In March Romania was third in the region from this point of view.

emil_boc1Executive to allot RON 35 billion for investments this year, RON 45 billion in 2012
Government will allocate RON 35 billion for investments this year, and a further RON 45 billion, the next, Mediafax quoted PM Emil BOC to have said in a press conference, on the 15th of April, 2011. "Investments, developments and jobs, this is what we need first and foremost, since this is how we can pay salaries and pensions. Government's goal is to re-channel more money into investments. In 2010, we apportioned RON 33 billion, this year, RON 35 billion, and in 2012, we will assign RON 45 billion", BOC said at the signing ceremony of the Valea Ialomitei underground depot and station part of the METRO Highway no 5.

BCR sees quicker economic recovery
Banca Comerciala Romana (BCR) revised its estimate of economic growth in 2011, from 1.2 pc to 2 pc, anticipating a potential quicker economic recovery, backed by the estimated rise in direct foreign investment, from EUR 2.6 billion in 2010 to EUR 4 billion, the bank's Chief Economist, Lucian ANGHEL, explained, in the report "Romania - Reverting to growth mode", released on the 18th of April by the bank, Mediafax reports.
DACIA new car sales, 17th in EU in Q1
According to the European Automobile Manufacturers' Association (ACEA) data, DACIA's new car sales in Q1 this year (62,819 units) were 17th in a 32-brand table, having dropped by 3.7 percent compared to the same period last year. DACIA's sales represented 1.8 percent of the total 3,583,185 units sold in the EU, a share similar to the one reported in the same period last year. New car sales in the EU dropped by 2.3 percent.
BNR Governor: RON appreciation, hard to counteract
The measures adopted by the National Bank of Romania (BNR) have had positive effects and one of them was that the financial system remained stable and the banks did not ask for and did not receive bailouts, the BNR Deputy Governor stated in his turn.
BNR: It's desirable for companies to meet crediting criteria instead of relaxing the latter
The desired development on the loan market is for companies to meet crediting criteria instead of relaxing those criteria, BNR Deputy Governor Bogdan OLTEANU stated on the 19th of April, during a financial seminar.


President: Sergiu COSTACHE CEO: Adriana PANCIU
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