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XPRIMM News No. 231, October 17, 2013

Insurance Newsletter, No. 231, October 17, 2013

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img_lead_4196CEE 1H2013: Good news ... still to come
by, 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.

img_lead_4191UNSAR estimates 1 million mandatory household insurance policies by the end of 2013
by, 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.
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img_lead_4195Reinsurers asking for deductibles for the Romanian compulsory home insurance policy
by, 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.
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turkey-statisticsTURKEY 1H2013: Close to the EUR 5 billion threshold
by, 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%.

img_lead_4197Solvency II to be postponed until 2016
by, 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.
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img_lead_4201CZECH Rep. 1H2013: Life pushed GWP down, floods inflate claims
by, 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.
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greco80GrECo opens an office in Turkey
by, 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.
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img_lead_4198ALBANIA, 1H2013: Compulsory insurance lines account for 43% of GWP
by, 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."
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img_lead_4202ESTONIA 1H2013: Impressive GWP growth rates, but low profitability
by, 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.
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img_lead_4206LATVIA 1H2013: Market growth owed to the EU branches
by, 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.

img_lead_4205HUNGARY 1H2013: For the first time in the last years, on the upword trend
by, 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.
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img_lead_4190PZU and ALDRIS bid for CROATIA Osiguranje
by, 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.
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img_lead_4199AZERBAIJAN: 16.86% growth driven by the voluntary life insurance - driver of growth
by, 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.
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img_lead_4203GEORGIA 1H2013: Health insurance on the rise; preparing for MTPL
by, 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.
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img_lead_4200CYPRUS 1H2013: Insurance market more resilient to the crisis than other financial sectors
by, 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, 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."

img_lead_4193RUSSIA: Which was the largest claim paid in the history of life insurance?
by, 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.
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img_lead_4194Ukraine: Health insurance could become mandatory in 2016
by, 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).
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img_lead_4192Ukraine: Fraud and financial and operational risk evaluation methods in the agricultural sector
by, 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.
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img_lead_4204GREECE 1H2013: 11% decrease in GWP under the prolonged crisis
by, 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.

Credit Europe Asigurari

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
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.


klime_poposki2_80Klime POPOSKI
Phd, President of the Council
Expert Insurance Supervisory Agency

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.
BCR Asigurari de Viata
Metropolitan Life

Czech Rep. 1H2013
Hungary 1H2013
Albania 1H2013
Turkey 1H2013
Kazakhstan 1H2013
Azerbaijan 1H2013
Georgia 1Q2013
Greece 1H2013
Cyprus 1H2013
Estonia 1H2013
Latvia 1H2013


orkhan_bayramov80Orkhan BAYRAMOV
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.
5th Annual Insurance Distribution Strategies Forum
October 17th-18th, 2013
Vienna, Austria
Organizer: Fleming Europe
Media Partner: XPRIMM Publications
For details:
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:
WorldPensionSummit 2013
November 13-14, 2013
Amsterdam, Netherlands
Media Partner: XPRIMM Publications
For details:
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:
For details:
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:
International Agricultural Finance&Credit Risk Management Forum
November 25-26, 2013
Hotel InterContinental
Kyiv, Ukraine
Organizer: AgroInsurance International
Media Partner: XPRIMM Publications
For details:
Middle East and Africa Insurance Summit
20th - 21st of January 2014
Dubai, United Arab Emirates
Organizer: Fleming Gulf
Media Partner:
For details:
3rd Annual Insurance Risk Management Forum
January 29th - 30th, 2014
Vienna, Austria
Organizer: Fleming Europe
Media Partner: XPRIMM Publications
For details:
FIAR 2014 - The International Insurance - Reinsurance Forum
May 25-29, 2014
Organizer: Media XPRIMM
Media coverage: XPRIMM Publications



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