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XPRIMM News No. 179, May 19th, 2011


XPRIMM News - The Romanian Insurance Market Newsletter
No. 179, May 19th, 2011
FIAR 2011

If you don't exist in Romania, you don't exist in CEE, either

One of the largest insurance groups in the world has officially launched, on the 12th of May, its operations in Romania. Awaited for nearly 10 years, AXA enters our country, counting on life and health insurance.

French giant's decision to invest here despite the current economic context is based on the fact that Romania is one of the largest markets in CEE, in terms of number of inhabitants, which is creating a long-term picture of the life and health insurance potential. Also, as stated by Cyrille de MONTGOLFIER, CEO of AXA Central & Eastern Europe, "if you don't exist in Romania, you don't exist in CEE, either".

AXA's investment in Romania is a positive sign for the insurance industry and also for the economy as a whole. A sign of trust in Romania's potential, a sign that things are about to change and that serious business can be done in our country...

A sign that strategies must be made looking towards the future...

Our new warranties insurance product had a positive impact on the market, CERTASIG being one of the few insurance companies that offer this type of policy, and this product is based on a strong reinsurance policy.

General Manager, CERTASIG

XPRIMM: How was the first quarter of 2011 for the company? How did the underwritings evolve and what were the main positive evolutions? Based on these results, what do you expect from 2011?
We are pleased to confirm an excellent start in terms of underwritings volume in the first quarter of 2011, especially in February and March, when a remarkable growth was registered.The portfolio continues to diversify with products with a low claims rate, thereby improving the profitability of the company, and this trend has also manifested for or work points strategically located in Constanta, Timisoara and Cluj. Sales through brokers still represent over 80% of the volume of written premiums, and this maintains our confidence in the success of this collaboration.

XPRIMM: The motor segment has no longer been the “growth engine" of the market, on the contrary, the Motor Hull decrease is one of the most significant negative evolutions in 2010. What do you think are the 2011 trends on the motor insurance class?
J. G.:
The Romanian insurance market registered a surprising decrease of the written premiums on the Motor Hull class during 2010. Only if the auto market, especially leasing, resumes its upward trend, will the Motor Hull written premiums increase significantly. The volume of the Motor Hull policies concluded by CERTASIG has been reduced mainly because of the new adopted strategy regarding the introduction of a less conventional system of franchise. Our goal is to offer the lowest Motor Hull rates in the Romanian insurance market only in the conditions in which a relatively high franchise is accepted, thus making a more rigorous selection of our clients.


Credit Europe Asigurari
FIAR_2009The last preparations for FIAR 2011
Monday, the 23rd of May represents the start for the conferences and special events of FIAR - The International Insurance-Reinsurance Forum, the most important spring event dedicated to these markets.
This year's edition takes place between the 23rd and the 26th of May and it includes 7 specialized conferences and several networking events.
For those who are not able to take part to the Forum,, XPRIMM TV and the FIAR 2011 XPRIMM Newsletters will constantly deliver, live from Sinaia, Romania, the hot news on all topics related to the insurance and reinsurance markets.

angela_toncescu_15The 18.2% MTPL decrease led to a 6.6% decline of the insurance market in the first quarter
The insurance market in Romania ended the first quarter of 2011 with a 6.6% decrease compared to 1Q/2010, with a volume of underwritings of RON 2.14 billion, according to data released by the Insurance Supervisory Commission (ISC) on the 12th of May, 2011. Amid a decline of 18.2% of the MTPL insurance, general insurance segment ended the first three months of this year with underwritings amounting to RON 1.7 billion, down by 8.84% compared to the similar period of 2010. "If the MTPL line had remained at the same level as in 1Q/2010, the general insurance underwritings would have decreased by only 0.9% in the first quarter", said Angela TONCESCU, ISC President, during a seminar held on the 11th of May, 2011. On life insurance, underwritings have increased by 3.34% in 1Q/2011, to a total of RON 433.83 million.

p_5786VIDEO: AXA relies on organic growth to enter Top 3 life insurers by the new business volume
One of the largest insurance groups in the world has officially launched, on the 12th of May, its operations in Romania. Expected for nearly 10 years, AXA enters our country, with a dynamic strategy, built around the brand "we are redefining standards", counting on life and health insurance.
"Entering the Romanian market is a real challenge for AXA CEE. This is due to the very high growth potential of the life insurance market in Romania. Otherwise, without the presence in Romania, our strategy at CEE level could not be applied", said Cyrille of MONTGOLFIER, CEO of AXA for Central and Eastern Europe.

p_5763ASTRA Asigurari: net profit RON 3.86 million and 1.5% more underwritings in Q1/2011. The 43% increase on property outweighs the motor market evolution
ASTRA Asigurari ended the first three months of this year with an underwritings volume of RON 335 million (almost EUR 80 million), up by 1.5% in comparison with Q1/2010, of which RON 332 million were represented by the non life segment, increasing by 1.5% as well. The company also announced a net profit of over RON 3.86 million for the first three months of the current year.

vigEUR 5 million loss for VIG in Romania in the first quarter
Romanian companies of the Austrian VIENNA Insurance Group VIG have registered, cumulated, total losses of EUR 5 million in the first quarter of the current year, after in 1Q/2010 they had achieved a profit before tax of EUR 7.41 million, representing an over 18% increase. This result comes amid increasing claims costs, under the circumstances of an extremely poor combined ratio, of 110%, according to the group's report. Underwritings of VIG in Romania totaled EUR 144.5 million in the first quarter of 2011, 2% less in European currency, compared to 1Q/2010, when they had registered a 12% decrease.

mariana_diaconescu1VIG confirms: Mariana DIACONESCU will be the new General Manager of ASIROM
Mariana DIACONESCU was nominated on the 16th of May by the Supervisory Board of VIENNA Insurance Group for taking over the position of General Manager of the insurance company ASIROM, the appointment being currently subject to approvals from relevant authorities, stated VIG representatives for XPRIMM Newsletters.

rangam_bir2ALLIANZ-TIRIAC: The negative evolution of motor lines was partially offset by a 14% increase on non-motor segment
ALLIANZ-TIRIAC Asigurari ended the first three months of 2011 with a total income of RON 256.4 million, down by 7% in comparison with underwritings of RON 277 million in the same period of time of the previous year. The profit before tax, calculated according to IFRS, stayed within positive grounds, recording RON 3 million, announced the company. The influence of underwritings decrease in the motor insurance activity was partially offset by a positive evolution of the general non-motor insurance portfolio.
"The achievements from the first three months are within our expectations. We have recorded an income growth for the whole non-motor portfolio, and this evolution reduces the dependence level of our results from the motor insurance activity. Regarding profitability, we are seeing the first signals towards improvement of operational results on motor insurance classes, due to tighter prudential underwriting policies for these lines", stated Rangam BIR, General Manager, ALLIANZ-TIRIAC Asigurari.

cornelia_comanWith business slightly falling in the first three months, ING Asigurari de Viata estimates a high appetite for protection and guarantees. 2011 will, however, be difficult
ING Asigurari de Viata's GWP volume registered a slight decrease in the first quarter of 2011 to LEI 133.5 million, (from LEI 136 million for the similar period of 2009), as a consequence of the reduction of the number of single premium unit-linked policies sold in the first three months.
At the same time gross profit was LEI 11.3 million, 28.7% below the 15.6% level registered in the first three months of 2009, as the company announced on the 5th of May, 2011. Nonetheless, the positive signals observed by the company were: the doubling of policy renewals, a decrease in the number of redemptions and terminations by 36% and a high appetite for protection and guarantees.

andrea_berkovaORACLE - comprehensive insurance software that bridges the gap between modern technology and deep industry functionality
ORACLE strategy for this year is fully influenced by Solvency II Directive which represents the most significant regulatory change in the insurance sector for over 30 years and its impact will be felt in every facet of insurer's business, according to Andrea BERKOVA, Insurance Solution Specialist, ORACLE. As Official Partner of this year's Edition of FIAR - International Insurance Reinsurance Forum, ORACLE will present its strategy in the CEE region for the insurance and private pensions industries within the International Markets Conference, taking place on May 24 at the Sinaia Casino.

GENERALI Asigurari decreases on non-life, but increases by 13% on life insurance in the first quarter
GENERALI Asigurari has registered a 13% growth on the life insurance segment in the first three months of this year, reaching an underwritings volume of RON 23.7 million, announced the company on the 16th of May, 2011. These results lead to a significant increase of the life segment share in the portfolio, up to 25%, 7% higher than in the first quarter of 2010.
ASTRA's Hungarian branch recorded EUR 10.6 million in underwritings
ASTRA Biztosito, the branch opened in Budapesta based on the establishment right of the insurance market's leader in Romania, underwrote in the first three months of this year premiums worth EUR 10.61 million - HUF 2.8 billion, announced the company on May the 10th of 2011, within a conference in Budapest. Paid claims and reserves set goes up to little over EUR 1 million - HUF 268 million.
CREDIT EUROPE Asigurari: Collaboration with independent brokers continues to be our strategic priority
The difficulties caused by the financial crisis over the last years lead to a tighter collaboration between insurers and brokers, as they understand the importance of a relationship based on trust and mutual respect. The Client - Broker - Insurer relationship is one of the subjects to be debated during this year's edition of the Brokers' Day at FIAR - International Insurance-Reinsurance Forum. Already a tradition now, CREDIT EUROPE Asigurari supports the conference as Main Partner and speaks about the importance of an efficient collaboration with brokers.
AIR Worldwide expands the AIR Pan European Earthquake Model coverage on 24 additional countries in Europe, including Romania
In 2011, AIR Worldwide's catastrophe modeling software platforms will feature a significant expansion of the AIR Pan European Earthquake Model, adding 24 countries throughout Western, Central and Eastern Europe, including Romania, according to Milan SIMIC, Senior Vice President of the company. Thus, the model will encompass a total of 30 countries and will feature an updated estimation of the region's seismicity based on the latest research and the model's damage functions will better reflect regional variations in construction practices and building codes over time.
VIDEO: CERTASIG executive management is extremely pleased with 1Q results
Last Wednesday 11th May, CERTASIG organized their third edition of the traditional broker cocktail party for their business partners and collaborators. More than 50 representatives of brokerage companies with whom CERTASIG work attended the exciting event at RAMADA North Hotel. The evening was relaxed with a short break for speeches. The main topics of the evening included very pleasing Q1 results and future projects for 2011.
FIAR's Brokers Day - challenges and solutions
Despite a good evolution lately, the brokerage activity on the Romanian market is not lacking challenges. "Some of these depend on the legislator, as an example the health reform or Pillar II for employees from national safety, premium deductibility for life insurance or mandatory household insurance - all these being in different stages of evolution that might create multiple opportunities for the brokerage market players and not only", Alexandru APOSTOL, General Manager, MAXYGO Broker, stated for XPRIMM Newsletters.
Sandor CSEPELI is the new CEO of CIG Romania
Sandor CSEPELI was named the new CEO of CIG Romania, replacing Istvan KADAR, who accepted another position within CIG Group, in Hungary. Before joining CIG Romania, Sandor CSEPELI was CSO (Chief Sales Officer) within ING Insurance Hungary, his main responsibility being the development of multi - channel distribution type: sale force, brokers and bancassurance.
Lack of common data base on motor hull insurance remains a disadvantage
Lack of a common data base on motor hull for all the motor insurance companies, available in real time, is a major disadvantage for the Romanian insurance market. That is because of the fact that without necessary information, underwritings, claims and anti-fraud departments cannot take decisions that can prevent and stop events with financial loss consequences.
aegonCEE and Asian markets boosted AEGON's new-business
In the first quarter of 2011, the new-business volume registered by the Dutch group AEGON on the life insurance segment was EUR 501 million with higher sales in the New markets (Central and Eastern European and Asia) and the Netherlands, offset by less favorable evolutions in the UK. The Dutch insurer ended the first three months of 2011 with total sales worth EUR 1.41 billion, with a slight decrease compared to the similar period of last year, when sales amounted to EUR 1.44 billion.

dmitry_danilenkoEASTERN Re developed its business in CIS and CEE
Reinsurer EASTERN Re, one of the market leaders in Russia and CIS region, increased its share of external business to 25% of the total portfolio in 2010, meaning a 159.5% growth of underwritings outside the country. In 2010 EASTERN Re collaborated with 37 countries (from 30 countries in 2009), including those in CIS and Central Europe, the amount of taken risks recording a significant increase on these markets.
"Due to the participation at FIAR - International Insurance Reinsurance Forum, EASTERN Re met worldwide leaders and specialists in insurance and at the same time developed collaboration relationships with the profile companies in Romania", declared Dmitry DANILENKO, Chancellor of General Director, EASTERN Re for XPRIMM Publications.

milli_re1MILLI Re: We evaluate the opportunities in order to increase our presence and involvement in the region
Factors such as the drastic effects of the global financial crisis in these markets, and take-over activities of local players by large European groups, have made it even more difficult for new entrants to penetrate these markets. Consequently, MILLI Re would like to continue our activities in these markets, to maintain our support to existing clients and evaluate the opportunities in order to increase its presence and involvement in the region. Also in line with this strategy, MILLI Re is attending and supporting as Strategic Partner the 14th edition of FIAR - International Insurance Reinsurance Forum, taking place on May 23-26 in Sinaia, Romania.

bulstrad_vigMore capital for BULSTRAD VIG
The Bulgarian insurance company, BULSTRAD, is planning a capital increase, by issuing new shares, on the 18th and 26th of May, 2011, with EUR 3.1 million, according to the Bulgarian Stock Exchange web site.
bvb1ERSTE-BCR: 10-15 pc, Bucharest stock market growth potential in 2011
The Stock Exchange could grow by 10 to 15 percent this year, say ERSTE-BCR analysts, the potential being calculated based on the estimates on Government credit, RON/EUR exchange rate and yield of specific euro Government binds, and most of the information indicating the end of recession being included beforehand.

Romanian oil reserves, third largest in EU
Romania's estimated oil reserves of 600 million barrels are the third largest in the European Union, reveals. The quantity represents around 11 percent of total EU reserves. Great Britain has the largest oil reserves in the EU (3.1 billion barrels) followed by Denmark (1.1 billion barrels).
DUSTER pulled Romania out of recession
The 0.6 pc-rise in GDP in the first quarter of 2011 was the result of a 40 pc-rise in exports, largely backed by DUSTER, whose exports rose by 500 pc in Q1, an analysis of "Ziarul Financiar" indicates. Figures show that the DUSTER pushed Romanian exports, which reported a boom in the first quarter of 2011, compared to the same interval of 2010, rising by 40 pc, at EUR 11 billion.
Guarantees, EXIMBANK's best offer for companies running EU funded-projects
EXIMBANK offers companies which run EU funded-projects all the classical banking products - letters of intent, pre-financing, co-financing -, but the bank's strong point on this segment is the fact it can offer state guarantees for all forms of loans needed to draw European funds, the bank officials stated, during the conference titled "Solutions for enhancing the absorption of European funds".
BOSCH seeks to build new plant in Romania
BOSCH is set to build yet another factory in Romania, a Greenfield investment, and to expand the component manufacturing unit at Blaj, Mediafax cited Brigitte EBLE, General Manager at Robert BOSCH Tool Corporation, the Romanian subsidiary of the BOSCH Group, to have said on the 17th of May, 2011.


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
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IT Department: Octavian GRIGOR, Dorin PALADE, Cosmin ARMASESCU



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