XPRIMM News No. 231, October 17, 2013

		Insurance Newsletter, No. 231, October 17, 2013 Click here to subscribe! Click here to unsubscribe!

TOP NEWS CEE 1H2013: Good news ... still to come by daniela.ghetu@mxp.ro, 2013-10-17 Despite the optimistic view expressed by the leading economic forecasting entities with regard to the economic rebound of the CEE region, the regional insurance market closed the first half of 2013 with a big, but hardly pleasant surprise: a 4.12% decrease in GWP, to a total of about EUR 17 billion. In absolute figures, the underwriting result of 1H2012 lags behind the previous year's figure by EUR 730 million, an amount that fairly equals, for example, the total premium production of the three Baltic markets. More UNSAR estimates 1 million mandatory household insurance policies by the end of 2013 by adina.tudor@mxp.ro, 2013-10-17 Adrian MARIN, Member of the Directorate Committee, UNSAR, pointed out during ICAR - The International Catastrophic Risks Forum that, after the recent regulation changes, it is now necessary to increase the sustainability of the household insurance systems, both mandatory and voluntary. More Продолжение Reinsurers asking for deductibles for the Romanian compulsory home insurance policy by mihai.cracea@mxp.ro, 2013-10-17 Presently, PAID has issued more than 425.000 insurance policies, covering a little more than 5% of the homes in Romania. That is one of the reasons reinsurance costs for PAID - The Romanian Natural Disaster Insurance Pool, are quite high at the moment, considering that insurance coverage dropped significantly since home insurance became mandatory in 2010. More Продолжение TURKEY 1H2013: Close to the EUR 5 billion threshold by vlad.boldijar@mxp.ro, 2013-10-17 In the first half of 2013, the Turkish insurance market continued its ascending path, the volume of GWP increasing by almost 25%, to approximately EUR 5 billion, according to the Association of Insurers, Reinsurers and Pensions Companies of Turkey. Despite this positive trend, the share of the insurance market in the GDP remained at a low level: 1.37%. For FY2013, the market authority estimates that this indicator will improve to approximately 1.45%. More Solvency II to be postponed until 2016 by mihai.cracea@mxp.ro, 2013-10-17 The Solvency II Directive, is to be delayed until 2016, according to Michel BARNIER, European Commisioner for internal market and services said in a statement.The Directive, already adopted, creates a modern and risk-based prudential regime for insurance and reinsurance undertakings. National regulatory regimes for insurance, which vary greatly, are no longer able to guarantee an efficient internal market and prevent possible future crises. More Продолжение CZECH Rep. 1H2013: Life pushed GWP down, floods inflate claims by daniela.ghetu@mxp.ro, 2013-10-17 At a slow pace, the Czech insurance market in 1H2013 also recorded the descending trend established in late 2011. The life insurance sector, accounting for more than 40% of the overall premium production, was responsible for the negative change recorded by the market turnover in the first half of the year. Thus GWP for the life insurance lines fell by 5.8%, to CZK 35 billion (EUR 1.35 billion). According to the representatives of CAP - the Czech insurers' association, the main reason of this trend is a significant drop in premiums for single premium life insurance, by 17%, mainly due to lower revenues of financial markets in the second quarter of this year. More Продолжение GrECo opens an office in Turkey by adina.tudor@mxp.ro, 2013-10-17 The Austrian insurance broker GrECo opened a new subsidiary in Turkey, GrECo JLT Sigorta ve Reasurans Brokerligi A.S., Turkey. The goal is to rapidly become one of the leading commercial insurance brokers on the Turkish market. GrECo has the experience of opening 15 subsidiaries in the Eastern Europe and has been active for nearly 90 years in the field of commercial insurance. More Продолжение ALBANIA, 1H2013: Compulsory insurance lines account for 43% of GWP by daniela.ghetu@mxp.ro, 2013-10-17 MTPL remains the most important product sold on the market, while on the life insurance side, debtors' life is the main product, where banks are the beneficiaries. According to Enkeleda SHEHI, Chairperson for the Albanian FSA, "in terms of potential for future growth, health and life insurance have shown to have a high potential for growth in the last years. However, it should be noted that the low penetration on the market (0.67%) could be interpreted as an indication that the market is not only underserved and operating far from its potential, but also in general it presents opportunities to unlock in the future, especially in property, life and health insurance." More Продолжение ESTONIA 1H2013: Impressive GWP growth rates, but low profitability by daniela.ghetu@mxp.ro, 2013-10-17 The Estonian insurance market ended the first half of 2013 with impressive growth rates in terms of GWP, but with less impressive results as far as profitability is concerned. Thus, according to data provided by the Financial Supervision Authority in Estonia, the total GWP amounted to EUR 217.55 million, 23.6% up y-o-y. At the same time, the consolidated net profit for life insurance decreased from EUR 12.73 million in 1H2012 to EUR 4.11 million in 1H2013, while the same indicator for non-life insurance fell from EUR 31.45 million in 1H2012. More Продолжение LATVIA 1H2013: Market growth owed to the EU branches by vlad.boldijar@mxp.ro, 2013-10-17 Due to the persisting economic and consumption growth, the insurance market is accelerating by 7%, as shows the data provided by the Statistical Office and FKTK. The value of GWP by insurance companies increased in respect of all major types of insurance, especially the life segment (+23%). During the reporting period, gross premiums written by insurers (local companies and branches of EU insurers) totaled LVL 168 million or EUR 239 million, of which gross premiums written by the EU companies reached EUR 61 million or 26% of the total premiums written. More HUNGARY 1H2013: For the first time in the last years, on the upword trend by daniela.ghetu@mxp.ro, 2013-10-17 For the first time in a long while the Hungarian market recorded a positive growth rate in real terms: a 4.72% growth in GWP, an over 1.9% consumer price index. However, according to the latest statement of the Insurers Association (MABISZ) , "this growth is rather fragile at this point as its primary source is an increase in single premium life insurance sales." Life insurance accounts for a 54% share of the GWP volume, with underwritings of HUF 231.7 billion (EUR 784.4 million), up 9.95% y-o-y in national currency. Non-life premiums amounted to HUF 204.2 billion (EUR 667.4 million), decreasing by 0.8% as compared with 1H2012. More Продолжение PZU and ALDRIS bid for CROATIA Osiguranje by mihai.cracea@mxp.ro, 2013-10-17 Polish insurer PZU has made a bid for Croatian state-owned insurer CROATIA Osiguranje. According to the Warsaw Voice, PZU is bidding on a 51.5% stake in the insurer at 900.9 EUR per share and additionally offering a EUR 50 million capital increase of the company. PZU's bid thus reaches EUR 192.5 million. More Продолжение AZERBAIJAN: 16.86% growth driven by the voluntary life insurance - driver of growth by olesea.adonev@mxp.ro, 2013-10-17 Despite the difficult economic conditions caused by the crisis that has a global character, the Azerbaijani insurance market continues to grow in all directions. This trend is indicated by the positive results for 1H2013, in local currency, an increase of 16.86%, as well as the legislative changes and ambitious projects for the future. More Продолжение GEORGIA 1H2013: Health insurance on the rise; preparing for MTPL by olesea.adonev@mxp.ro, 2013-10-17 On February 28th this year the universal healthcare program was launched in Georgia. This concerns the interests of citizens who do not have adequate health insurance. In less than five months since this program was initiated 1,347,658 people have been enrolled, more than 40 thousand of those being served in an out-patient setting, and almost 15.5 thousand receiving treatment in hospital, which cost the state treasury of Georgia nearly GEL 6.4 million. More Продолжение CYPRUS 1H2013: Insurance market more resilient to the crisis than other financial sectors by vlad.boldijar@mxp.ro, 2013-10-17 The outlook for Cyprus's financial markets - especially the banking system has remained negative and unchanged since May 2009, according to MOODY's Investors Service, ansamed.info informed. The financial crisis in Cyprus triggered a deep and prolonged economic recession that will further strain the already highly stressed operating environment. "In this context the outlook reflects the formidable challenges the banks are facing, namely acute asset-quality deterioration, continued concerns over their solvency, and intense funding and liquidity pressures. The banks will continue to operate in a highly-stressed environment, with MOODY's expecting a 12% contraction of GDP in 2013 and 6.4% in 2014." More RUSSIA: Which was the largest claim paid in the history of life insurance? by alina.ciobanu@mxp.ro, 2013-10-17 The Russian life insurance company CIV Life, part of the German group TALANX AG, recently paid a claim of approximately USD 3.2 million for a life insurance policy. The policy holder was an employee of a very important company. More Продолжение Ukraine: Health insurance could become mandatory in 2016 by alina.ciobanu@mxp.ro, 2013-10-17 Health insurance could become mandatory in Ukraine starting 2016 if the Law Project proposed on April 5 is adopted, Vladimir DUDKA, Member of the Committee on Health System, Ukraine Parliament (Supreme Rada). More Продолжение Ukraine: Fraud and financial and operational risk evaluation methods in the agricultural sector by olesea.adonev@mxp.ro, 2013-10-17 Preventing and eliminating financial fraud in the agricultural companies from the CIS countries represents one of the main problems that the banking specialists have to confront when analyzing the credit documentation. According to bankers and international consultancy agencies in the former soviet countries, identifying such false data represents a challenge for the financial sector. More Продолжение GREECE 1H2013: 11% decrease in GWP under the prolonged crisis by vlad.boldijar@mxp.ro, 2013-10-17 The Greek economy will shrink again, according to IMF estimates. In 2012 the GDP fell for the fifth consecutive year, while in 2013 it is expected to decrease by 5.3% to EUR 183.5 billion. At the same time, the private consumption will remain at a low level due to a record-high of unemployment: the unemployment rate at the end of 2013 will be 27% as compared with 7.7% in 2008 (IMF statistics). Under these circumstances, the financial industries continued to suffer. More PRESS CUTTINGS ALBANIA: 40% of vehicles without insurance AZERBAIJAN Parliament proposes draconian measures for compulsory insurance evasion AZERBAIJAN plans to increase insurance payments of population 3-fold, so that they exceed the property tax payments AZERBAIJAN to make changes in insurance legislation BULGARIA: General insurance sector's revenues decline during four years to 2012 CZECH REPUBLIC: Frauds uncovered by insurers up 10-25% in Jan-Sept Eximgarant of Belarus, Ukreximbank sign agreement on cooperation LATVIA: One-third of all property insurance claims are paid for flood damage MP: Specific volume of insurance in Azerbaijan's GDP to increase to one per cent OTP in bid for privatized Croatian bank POLAND places further restrictions on second-pillar pension funds POLAND: Orange offers unemployment insurance Self-regulating organization of insurers and state insurance company could be created in UKRAINE SLOVAKIA close to losing arbitration against Achmea UKRAINE: Crop insurance becomes more affordable

EDITORIAL Is Poland the CEE barometer? Looking at Poland when you need to see the CEE trend, may be a simple rule for those who need to get oriented in the CEE insurance landscape. But is it really Poland the region's barometer? In strictly financial terms, the answer is yes. But figures are not enough to get acquainted with the regions' dynamics, especially taking into consideration the area's diversity. More daniela.ghetu@mxp.ro INTERVIEW Klime POPOSKI Phd, President of the Council Expert Insurance Supervisory Agency Macedonia I am glad that the 4.73% increase in the non-life insurance is due to voluntary insurance, especially property insurance. That is why I think that 2013 will end with in a positive trend in both segments of the insurance. Also, we expect the insurance companies to improve profitability during 2013, given that in the previous 3 years, most of the companies showed losses in their operations due to undertaking major reforms in order to comply with legal requirements imposed by ISA. More STATISTIC UPDATES Czech Rep. 1H2013 Hungary 1H2013 Albania 1H2013 Turkey 1H2013 Kazakhstan 1H2013 Azerbaijan 1H2013 Georgia 1Q2013 Greece 1H2013 Cyprus 1H2013 Estonia 1H2013 Latvia 1H2013 POINT OF VIEW Orkhan BAYRAMOV Chairman AIA - Azerbaijan Insurers Association We are expecting a growth of approximately 20% by the end of the year. It is also expected that the role of the individual customers in the market will increase and insurance companies will try to sell more individual products rather than corporate products. More EVENTS 5th Annual Insurance Distribution Strategies Forum October 17th-18th, 2013 Vienna, Austria Organizer: Fleming Europe Media Partner: XPRIMM Publications For details: www.flemingeurope.com STELLAR Re Romanian Evening October 19, 2013 Kurhaus Restaurant, Kaiseralle Baden-Baden, Germany Organizer: STELLAR Re International Conference - The Strategy of Developing the Life Insurance Market: Practical Aspects of Its Implementation November 7th 2013 The "8 Columns" complex Moscow, Russia Organizers: The Association of Life Insurance Companies and the All-Russian Insurance Association Media Partner: XPRIMM Publications For details: www.insur-life.ru WorldPensionSummit 2013 November 13-14, 2013 Amsterdam, Netherlands Media Partner: XPRIMM Publications For details: www.worldpensionsummit.com National Bancassurance Conference Friday, November 15th, 2013 Hotel Leogrand, Raut Hall Chisinau, Republic of Moldova Organizer: Media XPRIMM EIOPA Conference November 20th, 2013 Frankfurt am Main, Germania Organizer: EIOPA Solvency II Forum November 21st-22nd, 2013 Vienna, Austria Fleming's Deluxe Hotel Organizer: GLC Europe Media Partner: www.xprimm.com For details: www.globalleadingconferences.com November Reinsurance Meetings November 25th - 26th, 2013 New Square, Moscow Organizer: All-Russian Insurance Association (ARIA) and co-organizer - Business Format Group Media Partner: XPRIMM Publications For details: www.ins-df.com International Agricultural Finance&Credit Risk Management Forum November 25-26, 2013 Hotel InterContinental Kyiv, Ukraine Organizer: AgroInsurance International Media Partner: XPRIMM Publications For details: www.agrifinanceforum.com Middle East and Africa Insurance Summit 20th - 21st of January 2014 Dubai, United Arab Emirates Organizer: Fleming Gulf Media Partner: www.xprimm.com For details: finance.fleminggulf.com 3rd Annual Insurance Risk Management Forum January 29th - 30th, 2014 Vienna, Austria Organizer: Fleming Europe Media Partner: XPRIMM Publications For details: www.flemingeurope.com FIAR 2014 - The International Insurance - Reinsurance Forum May 25-29, 2014 Organizer: Media XPRIMM Media coverage: XPRIMM Publications STATISTICS Albania Armenia Bosnia Azerbaijan Bulgaria Belarus Croatia Georgia Czech Rep. Kazakhstan Estonia Kyrgyzstan Hungary Moldova Kosovo Russia Latvia Turkmenistan Lithuania Tajikistan Macedonia Ukraine Montenegro Uzbekistan Poland   Romania   Serbia Cyprus Slovakia Greece Slovenia Turkey