A Bet on Life Insurance

The underwritings accomplished by life insurance market, in 2006, reached EUR 0.3 billion (RON 1,140 million), 13% over the value registered in 2005. "We consider that life insurance sector will grow even more in 2007, thus its share in total insurance market will change substantially", stated Angela TONCESCU, The President of Insurance Supervisory Commission.

Today, the life insurance structure in total gross written premium volume has increased up to 24%, compared to 6% value of the same index in 1997.
This value is still bellow the one of the European countries, where 60% of this particular industry is life insurance. Also, compared to the situation in Europe, were the entrance ratio is 5% of gross domestic product GDP, in Romania, this index is 0.4%.

The experts forecast that Romania's accession to the European Union will produce series of changes on Romanian life insurance market. In these conditions, the local competition and professionalism and the possibility to invest without restrictions in the whole European area will increase. The existing insurance companies will have the opportunity to enlarge the distribution channels.

This way, the share of the sales intermediated by own agents will decrease from 80% to 72% in 2010. But, on the other side, the sales of insurance policies through banks, brokers and Internet will increase.
There are also, series of reasons because of which we should look optimistically to the future, the most important being the growth of capital efficiency and development opportunities.

Thus, if the level of life in Romania increases and reaches the one of the European countries in matter of financial assets of the population, development premises will surely appear.
According to the estimations of ING Life, the underwritings for this field will point, at the end of the year 2010, RON 3 billion. In the same interval, the life insurance penetration rate in GDP will mark 0.9-1 per cent, compared to 0.4 per cent as it is now. So, we are talking about a growing market which will triple its volume in the next 4 years.

Therefore, the expectations are really favorable for the companies implicated in this market: a great growth potential and a significant protection deficit.
So, at the beginning of this spring, we can put our bets on life insurance...

by mihaela.circu@mxp.ro

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Interview with Mr. Gabor KEPECS,
CEO (Chief Executive Officer)
AEGON Central and Eastern Europe

XPRIMM: AEGON is a big player at international level. However, being not present in Romania until now, it is not very well-known here. So, first of all, please let us know more about your company.
Gabor KEPECS: AEGON is a company which has a huge experience in three business lines: life insurances, private pensions and asset management. These are our core competencies and the focus of the whole group.
AEGON as it is known today, was established in 1983, its oldest roots can be traced to the period when the company provided modest burial funds to customers to ensure a decent funeral for a family member or loved one. These funds are the historical roots of industrial life insurance. Although AEGON started originally as a local, small-size company, if you look today to the overall turnover, 2/3 of it comes from the United States and another big part is coming from United Kingdom and the Netherlands. Beside that, I think that it is very important that a more and more large part is coming from emerging markets like the Southern and Eastern Europe, China, Taiwan. So, we are trying to expand our activity in different markets but also important is that countries from South and Eastern Europe were more important in the last 5 years than it has been before.
Every multinational company has its own approach towards the new markets it enters and AEGON, as a multinational itself, is not different in this respect. The difference comes with our strong belief that local knowledge is very important and can essentially contribute to the success. So, having a very strong financial background which gives us a global power, we are working with local management. If you look to our operations, for example in the Czech Republic, Poland and Hungary, everywhere we have a local management. That is the combination that must be: local management, local knowledge and the global power. That's really what we decided to bring to the Romanian market as well.

XPRIMM: What can you tell us about your operations in the CEE countries?
G.K.: We entered Poland last year through an acquisition. This means this is the first operations year, but it is already a company which has five years experience and a strong position on the Polish market. Year by year they are performing better and better and they are already, considering the half year results, the second in the life insurance market.
If do you look to the other countries, we are not so young in the Hungarian market. We started in 1992 and we are a strong company in life, pensions and dwelling insurances. We are the second in the private pensions, with about 600.000 members in our pension funds, in life we are the second as well, and we also have 36% of the home insurance market. In Slovakia we started in 2004 and we entered in the private pension scheme in 2005, and today we are the third in a market where we have very strong competitors. In the Czech Republic we started only half a year, so it is a very new operation and we have decided to enter the pension scheme also.

XPRIMM: How would you compare these countries? I mean the mentality, the customer behavior?
G.K.: It is a very good question because it is really different from country to country. Of course, if you compare the mandatory pensions you can't say much of the market because, after all, mandatory is mandatory, so people enter because they are pushed to do so and also there is not their money, so it isn't their decision. On the other hand, there is an important message in the mandatory pension fund system. It is common that everybody believes in it much more than politicians do. If you look in Hungary, 85% of the population under the age of 45 entered into the system without any pressure. In Slovakia, the percentage is also 85%. In Poland is even more. People like private pensions because they believe it's their business.

If you look on the life side, it is a little different. In Hungary people were relatively reluctant in the beginning, but in the last five years, more and more of them started to buy life insurance policies. Of course, the life insurance market itself developed and, as a result, it offers much more interesting and diversified products. If you look in Poland, Poland has a huge single premium market. This is partly true for Hungary too. Growth figures are every year double digit figures and I believe this shows that life insurance is going into the savings market. In Czech Republic it is a more conservative approach. They take care about their money. It's a different attitude. But all these markets are growing rapidly, it's common that life insurance growth in the last 15 years was at double digit rates. This is coming, of course, from the very low penetration, comparing to the rest of Europe... If you look in Czech, Hungary and Poland, there are far away from the Western standards, but it is already over 3% of the GDP while in the rest of Europe is around 6 - 7% of the GDP now, but 15 years ago it was around 1%. So, these are big achievements. I strongly believe that in Romania, in 5 -10 years, the penetration is going to be at least double than now. It will be the natural effect of your economic growth, which has very high rates and will be the source of a better living standard, so the saving behavior of the population will change and life insurance and pensions will benefit.

XPRIMM: Traditionally, AEGON's approach towards entering the CEE markets was to start operations in life, pensions and home insurance. A year ago you have announced a change, by replacing home insurance with asset management. Please comment.
G.K.: At the time we entered in Hungary we had there a heritage in non-life insurance and everybody agreed to keep it because it was a good business, and it could be a good business in the future also. But the truth is AEGON doesn't have so much experience in this field as in life, pensions and asset management. We are a big operator in Netherlands and Hungary, but this is not enough to competing the big players who are very strong in non-life business. On the other hand, non life, for example home insurance, is a potential market everywhere, but it depends on the market development. I have a message everywhere I go: you have to be big in every market from at least 2 reasons. First if you are a big player you can attract good people and insurance business is very much about people and human resources. Secondly, if you're not big enough you can't be efficient. If you're not efficient you can't compete. So, we invest in home insurances only if we achieve a very rapid development and if it's in addition to life and pension in order to serve our clients better. But our purpose in the next five years is to stay in pension, life and asset management because in the last four years we managed to double our overall assets under management in this region and I think that it's better to be in this type of business than to go on other, where you are less efficient.

XPRIMM: You have also changed your option from acquisitions to greenfield.
G.K.: In '90 the group's strategy was to make acquisitions. If you want to be big, you must make acquisitions, because if you start greenfield operations you are immediately small. This was a very clear strategy. In 2001-2002, I asked my colleagues in the Board how we could approach the South-Eastern European market because it was very clear that there weren't many companies for sale which would fit us, mainly in life and pensions. The next question was either to leave these markets or to change our line. We agree to start greenfields in Slovakia, Czech Republic and in Romania as well.
We had a good expert team in Hungary, as we were already active on this market for quite some time. I thought that if we enter other countries, I will try to develop an expert team there as well and to bring them together. Maybe the actuaries are better in the Czech Republic, or the product developer is best in Poland; maybe the administration is best in Romania, so we can work better if we exchange knowledge and the greenfield can be successful. This is what we have done, from Hungary we exported life products to the Slovakian market, then in Slovakia we developed certain products and we transferred them and so on. This is really how I like to operate. This is in every field of our activity: IT, product development and also partly in sales and training. In sales it is the most difficult because sales is very market linked and every market is different.

XPRIMM: Is it correct to say that Hungary is the center of AEGON's operations in the CEE countries?
G.K.: I wouldn't say that. I am located in Hungary, but if you look to our team today the IT operator is a Czech, in the product development we have a team of Polish and Canadians. So, I would say it is much more an international team. For bancassurance I would like to take people from Romania. For example last year and this year we had meetings to discuss what our strategy is, and people from every country attended. I really believe in this type of approach but I learnt it in the group, it's not really my knowledge. I like this attitude, maybe that's why I stayed so much in this company, for 15 years.

XPRIMM: Thank you!

by daniela.ghetu@mxp.ro

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Mr. Gabor KEPECS,
CEO,
AEGON Central and Eastern Europe

Romania GDP up 7.7% in 2006
Romania's gross domestic product grew 7.7% to 342.48 billion RON in 2006 compared to the previous year, according to data released by the National Statistics Institute. In Q4 2006, the GDP stood at 112.47 billion RON, 7.7% above the same period in 2005.
The 2005 GDP summed up to 287.1 billion RON, 4.1% up from 2004, when the pace of growth reached 8.3%.
In Q4 2006 the GDP was put at RON 112.4 billion in current prices, i.e. 7.7% higher than in the corresponding period of the previous year. The economy grew by 8.4% in 2004, but the growth pace declined to 4.1% in 2005, primarily because of the damages caused by floods in agriculture. The National Forecast Commission expects a 6.5% economic growth rate this year, a level similar to the estimate presented last autumn and to International Monetary Fund forecasts. Also, World Bank's officials expect Romania to report an over 6% economic growth rate this year, i.e. lower than in 2006.
by mihaela.circu@mxp.ro, 7.03.2007

BCR invests EUR 200 million
The Romanian Commercial Bank (BCR) will inject EUR 200 million by mid-2008 in the Integration and Development Program (IDP). The program seeks to expand the bank's territorial network from 478 to nearly 700 units and to open over 50 business centers for small and medium-sized enterprises. The BCR Executive President, Nicolae DANILA told that this is the best time for such program, and that, exactly due to the bank undergoing full expansion. "The best moment for transformation is when the business is solid, successful and the trends heads up", the quoted official outlined.
The program, which involves the work of 550 experts, has more than 40 projects in its portfolio, aimed to ensure both business development and functional improvements in the internal means of operation, which have in view corporate segments, risk retail and management, reporting and controlling, to the operations and IT areas. IDP's goal is to strengthen BCR's position as a leader on the Romanian banking market. "To be a leader means not only to be the largest bank in the system, but also to be the best," Oana PETRESCU, the BCR Operations Executive Vice-president declared. Also, the program seeks to increase proficiency and profitability, and to implement certain successful practices of the ERSTE Group and to upgrade all the processes. The bank has therefore set out to extend the front-office capacity and distribution through alternative channels, contact centers, ATM and self-banking. Nicolae DANILA said that things would not stop here. "In the future, we will proceed with our development. In 2007, we have in view a 31 per cent assets growth and 62 per cent rise of the net profit". The BCR president holds that speed is more important than perfection and proposes a set of principles for fulfilling the targets during the next two years. BCR, a member of the ERSTE Bank Group, is a universal bank, Romania's most important banking institution, which handles assets equal to over EUR 13 billion. The bank offers a wide range of products and services, has 478 branches and agencies nationwide, most of them in cities with population of over 100,000 inhabitants. The bank makes available to its clients Internet Banking and e-commerce services, issues 22 types of credit and debit cards and has installed the biggest national network of ATMs - over 1,300 - and over 10,000 POSs.
by costi.boroda@mxp.ro, 6.03.2007

Mobile telephony penetration rate reaches 81%
The number mobile phones users - prepaid cards and subscriptions - was 17.4 million at the end of 2006, some 30% more than the year before. The penetration rate of the services was 81%, Dan GEORGESCU, Head of the National IT&C Regulation Authority (ANRCTI), said.
The number of Internet connections was 3.3 millions at the end of 2006, 80% more compared to 2005. 1.8 million connections are through broadband networks, representing a 135% growth year over year, up to an 8.2% broadband penetration rate.
by costi.boroda@mxp.ro, 5.03.2007

PETROM reports EUR 647 million profit in 2006
The net profit of Romanian oil producer PETROM, the biggest company in Romania, rose by 61% to RON 2.28 billion (EUR 647 million in 2006). Its full business value was valued at RON 13.07 billion (EUR 3.71 billion), up 22% compared to the previous year.
Increasing oil prices are the main reason for such a profit boost, according to a PETROM release sent to the Bucharest Stock Exchange.
The news comes as Austrian oil and gas group OMV AG reported its net profit for Q4 2006 increased by more than 24% as its Romanian subsidiary PETROM was for the first time included in its financial reports. OMV said its net profit for the period stood at EUR 294.7 million, according to Dow Jones Newswires.
by costi.boroda@mxp.ro, 6.03.2007

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The insurance market heads for EUR 2 billion
The Romanian insurance market exceeded, in 2006, a 1,65% penetration rate in GDP, comparing to 1,54% in the previous year. Thus, the insurance companies' volume of gross written premiums reached RON 5,740 million (EUR 1,6 million), up with 34% comparing to the last year's results.
"We estimate that this year the insurance market will have a 25-30% development rate", Angela TONCESCU, Insurance Supervisory Commission's President stated during the seminar "Romanian insurance market. Past and present. European challenges". So, if this estimation will become true, the market will surpass EUR 2 billion at the end of this year.
The general insurances registered RON 4,6 million ( EUR 1,3 billion), up with 40%.
With EUR 0.3 billion, life insurances increased only 13%.
"We believe that the life segment's enhance registered in 2007 will be more significant and so its weigh in whole insurances will change", Angela TONCESCU stated.
At the end of 2006, there were 5,3 million life insurance contracts and 7,6 million life policies.
As usual, in 2006, motor insurances dominated the Romanian insurance market with 68%.
The most important growth was obtained by health insurances which registered a 208% increase.
In 2006, the paid damages were EUR 0.74 billion from which EUR 0,7 billion on general insurance segment.
Insurers are confronting with a problem represented by damages. Thus, the average damage rate on the general insurance segment was 65%, but eight insurance companies registered over 70% of this indicator.
However, according to the estimations of Cristian CONSTANTINESCU, the President of the National Association of Insurance and Reinsurance Companies from Romania, insurance market, as a whole, ended 2006 with a loss, after it obtained a profit rate below 1% in 2005. This estimations will be confirmed or not by the audited results.
by mihaela.circu@mxp.ro, 23.02.2007

2006: Changes in Top 10
ASIBAN changes its place with ING Life and climbs to 4th place, ASTRA-UNIQA grows two positions and gains 1.46% in market share, while GENERALI gets up two places and realizes the second increase in absolute value.
UNITA drops two places and loses 1.16% from market share and the new acquisition of Czech from PPF, ARDAF, leaves its position in the top in favorite of BT Asigurari. This kept its development rhythm, succeeding more than doubling its written premiums and gained 1.34% from market. So, these are the changes in the Top 10 of the last year.
Last year, the value of the gross written premiums was EUR 1.62 billion, meaning RON 5.72 billion calculated to the average exchange course of 3.52 RON/EUR. The insurance market grew almost 34% in national currency while the real increase being 23,6%.
In absolute value, the insurance companies underwrote with EUR 405 million more than 2005.
The first 10 companies in the market underwrote an amount of gross premiums of EUR 1.31 billion, meaning 80,79% from the market in the analyzed period. Though 6 from the 10 companies diminished their market share, the concentration degree grew to 0.38% comparing to 80.41% in 2005. The other 4 companies increased their market share in 2006 and had a great contribution to maintain the concentration degree to 81%: GENERALI +2.3%, ASTRA +1.46%, BT Asigurari +1.34% and BCR Asigurari, which though dropt life insurances, enhance its market share with 0,68%.
ALLIANZ-TIRIAC continues to be the leader, with a 19,49% market share. Also, ALLIANZ-TIRIAC is the first company which exceeded RON 1 billion. The company underwrote in 2006 almost RON 1.12 billion (EUR 317 million) , with 22.72% more in real growth, in national currency, than 2005. The nominal increase in EUR was 32.31%. The insurer had the most important growth in absolute value, adding EUR 77 million to the results of 2005.
The entire results of the Romanian insurance market can be read in the No. 2/2007 of the Insurance Profile Magazine.
For online order, click here!
by alex.rosca@mxp.ro, 6.03.2007

Good signs for the insurance industry
More than half of the Romanians consider private insurances a good alternative to the social insurance system, according to a survey realized by INSOMAR, in OMNIBUS regime, to the request of the Insurance Supervisory Commission, during 18-23 January 2007. Thus, their weigh reached 59%, up with 13% comparing to April 2003, when a similar survey took place.
12% of population bought a life insurance, comparing to 8% in 2003, the majority from these being from urban zone, Transilvania and Bucharest, and having high education and age between 18 and 34. The percent of those who believe in the benefits of this type of insurance registered a slow increase from 64%, four years ago to 65.6% .
About 67% of population, irrespective of age, education or region appreciates that a health insurance is very helpful.
From those possessing a car, 85% have a motor third party liability, 23% have a motor hull and 8% have no motor insurance.
12.8% of Romanian population bought a household insurance, in comparison to 7% in 2003, most of them being from urban zone, having high education and the maximum age 50.
In the end, the percent of people who agree the implementation of compulsory household insurance exceeds 60% comparing to the 38% of the previous survey. In addition, we would like to mention that the weigh of the positive percents passed 50% both in urban and rural zone.
by andreea.ionete@mxp.ro, 23.02.2003

Life insurance, RON 3 billion in 2010
"In 2010, the amount of gross written premiums from life insurances will reach almost RON 3 billion and a weigh of 30% in the Romanian insurance market.", Bram BOON, CEO of ING Asigurari de Viata appreciated during the seminar " Romanian insurance market. Past and present. European challenges"
Nowadays, the gross written premiums on life segment grew 24% in comparison to 6% in 1997. This way, in 2006, life insurances realized RON 1.25 billion. The proportion with general insurances is below the one from other European countries, where 60% of this industry's business represents life insurances. Comparing to the Europe's situation, where the penetration rate is 5% of GDP, in Romania, this indicator is 0,4%.
The adhesion of Romania to European Union will cause a lot of changes to the Romanian life insurances, the representative of ING Asigurari de Viata believes. In this context, the competitiveness and professionalism on local plan will develop in the same time with the possibility of investing freely in the European area. The companies present on market will have the chance to widen their distribution channels.
Among the necessary conditions in order to develop and regulate the profile market, they can mention, as Bram BOON stated, the increase of the training standards of the retail agents, the transparency' s enhance in the communication process with the clients and the application of the new capital requests.
As well, another modification in the life insurance industry is represented by the change of sell weigh, through agents of own, from 80%, at present, to 72% in 2010. Instead, the sales of policies through banks, brokers and Internet will grow. The official of ING Asigurari de Viata declares that the sales through banks will register the most significant increase, from 14% at present to 18% in 2010. The brokers and the Internet will sell with 2% more than at present, reaching 8% and respective 2% in 2010.
by costi.boroda@mxp.ro, 23.02.2007

EUR 317 million for ALLIANZ TIRIAC
ALLIANZ-TIRIAC Asigurari registered in 2006 an amount of gross written premiums of EUR 317 million, up with 32% comparing to 2005. The gross written premiums on general insurances were EUR 292 million, while life insurances registered EUR 25 million.
According to the preliminary results, ALLIANZ-TIRIAC kept, at the end of 2006, the leading position on the Romanian insurance market.
According to some estimations made by the officials of ALLIANZ-TIRIAC at the end of the last year, the insurer's profit was EUR 11.7 million.
by andreea.ionete@mxp.ro, 23.02.2007

ING Life is still on top
ING Asigurari de Viata has, at present, more than 40% of the whole Romanian life insurance market, with a RON 41.8 million profit at the end of 2006, which means a 21,3% increase.
"We are glad that we have made a remarkable growth of the market share, till 41,2%. Also, the 11% enhance of net premiums (RON 434 million) represents an exceptional evolution for ING Asigurari de VIata, meaning a 3 times more than the increase rhythm of life insurances in 2006", Bram BOON, General Manager of ING Life declared.
According to ING's official, the excellent result is due, in the first place, to the protection products sale's enhancement in the previous year and to the pension plans' sales.
As regards the objectives for 2007, the company intends "to improve its imagine and to consolidate its position on the life insurance market, becoming the favorite provider of life insurances and pensions in Romania".
For 2007, we intend to increase our gross written premiums with 15%, but we expect to have a smaller profit comparing to 2006 because of the expenses imposed by the establishment of a specialized company on the private pension segment", Cornelia COMAN, Deputy General Manager of ING Life explained.
by vlad.panciu@mxp.ro, 1.03.2007

Preparations to implement
The Private Pension Scheme Supervisory Commission (CSSPP) established the calendar for the implementation of the compulsory private pension. According to it, in a first phase, the elaboration of the application norms of Law no. 411/2004 regarding the private pension funds modified and completed by Law no. 23/2007 will take place. Thus, at the beginning of 2007, the entities' authorization and appraisal process will begin and from august 2007, the participants will be able to choose the pension fund they want to adhere to. From January 2008, the contributions to the private pension funds will be collected.
CSSPP approved on Tuesday, the 27th of February, the first two application norms of Law no. 411/2007 as follows: the norm regarding the authorization of the administrators of private pension funds and the norm regarding the taxes for authorization, appraisal and functioning of private pensions system. These two norms were under public debate and were analyzed by the interested professional organizations and by the social dialog partners.
by liviu.huluta@mxp.ro, 1.03.2007

Insurance brokerage is blooming
"The Romanian insurance brokerage market is blooming and that's why BIPAR (The European Federation of Insurance Intermediaries) is proud of the association with the National Union of Insurance Brokerage and Consultancy Societies from Romania (UNSICAR)", Nic de MAESSCHALCK stated in the opening of the second edition of National Conference of Brokerage, organized by UNSICAR, with the Media XPRIMM support.
The conference's moderator and host, Bogdan ANDRIESCU, President of UNSICAR, highlighted that Romanian brokerage gains more and more ground and in the same time it has to play by ear as regards the European integration's problems.
"2006 can be appreciated as the year when the market grew to EUR 288 million gross written premiums, and the market share to 20%", the quoted official added.
He also emphasized that the UNSICAR's members have, at present, 70% from the Romanian brokerage market.
The European brokerage was the conference's light motive, Angela TONCESCU, President of Insurance Supervisory Commission, urged the leaders and specialists : Now, at the beginning of the road , it would be indicated the brokers to get involved in the population's education"
At the end of the first part, Cristian CONSTANTINESCU, President of he National Association of Insurance and Reinsurance Companies from Romania stressed the need for the increase of the professionalism level doubled by the improvement of the insurer-broker relation.
As a conclusion, they can say that certainly the adhesion to European Union has not only advantages, but many challenges.
by liviu.huluta@mxp.ro, 5.03.2007

ALLIANZ-TIRIAC, the first on the private pensions market
The Council of the Private Pension Scheme Supervisory Commission (CSSPP) approved on 6th of March 2006, the request for the authorization needed to establish the first pension company from the Romanian facultative pensions market, ALLIANZ-TIRIAC Administrative Company of facultative pension funds.
ALLIANZ-TIRIAC has put in documentations for entering Pillar III on 22nd February 2007.
"We have made a business plan for the next 10-20 years, our intention being to become the leader of this segment", Dr. Crinu ANDANUT stated.
Leader of the Romanian insurance market, ALLIANZ-TIRIAC, is also interested in the second component of the public pension scheme's reform (Pillar II, compulsory private pensions).
"The financial power of ALLIANZ-TIRIAC and of ALLIANZ Group, the international expertise to which we have access, through ALLIANZ, on the European markets and on Central East European region, beside a developed distribution network are the main advantages we count on gaining the leading position of this market", the official declared.
"The authorization/appraisal process of the entities from the facultative pension market, started on 30th October 2006, is a continued process and those interested can put in requests to CSSPP, along with the documentation asked by Law no.204/2006 and by its application norms", the CSSPP representatives explained.
In order to be authorized a company should fulfill the following general conditions: to be established as a joint-stock company, have as unique activity object collection, administration, investment of the actives of facultative pension funds and, optionally private pensions' payment; the name of the society must contain the collocation " administrative society of facultative pension funds and must not contain elements that induce in error participants, potential participants or other persons. In the same time, the social capital must be represented through shares issues by pension companies, which are nominative, can't be preferential and can be denominated. The company's status must stipulate that shareholders can't have preferential rights or other privileges and is forbidden the rights' limitation or setting out supplementary responsibilities.
Also, it's necessary that participations less than 1% should not represent, cumulative, more than 10% from the social capital, and the founders must prove the infusion and the form of it , which must be according to the laws and norms issued. Those interested have to put in the proof of the tax payment for the establishment of a pension company.
by mihaela.circu@mxp.ro, 7.03.2007

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New players on the Ukrainian Insurance Market
The Slovenian Insurance Group TRIGLAV announced its intention to enter the Ukrainian Insurance market in 2008-2009. Its interested is to acquire or to set up a new company which will operate on both life and general insurance sector.
"First of all, we will try to find a suitable company for the acquisition we intend to make, and if we do not locate anything, we will analyze the possibility of establishing a new company", TRIGLAV representatives stated.
Currently, TRIGLAV is the leader on the Slovenian Insurance Market, owning 55% market share in general insurance sector and 50% market share in life insurance sector.
TRIGLAV is the third Central European Company interested in Ukraine, after PZU (Poland) and Ceska POJISTOVNA (Czech Republic).
The Ukrainian insurers appreciate that other companies from Central and Eastern Europe intend to enter the Ukrainian market, among these being WARTA (Poland), EUREKO, ERGO and CEZK INSURANCE Company.
The moment the Slovenian insurer intends to enter the market was not randomly chosen. According to the forecast for 2008, big western insurers like AXA, AVIVA, ING, ALLIANZ and AEGON will enter the Ukrainian insurance market. They will be followed by other players after 2008.
by irina.galasanu@mxp.ro, 2.03.2007

Ukraine - premiums of EUR 50/inhabitant
The insurance premium level per inhabitant in Ukraine is 40 times lower than in EU countries.
"The national insurance market is evolving towards an extremely concentrated market. The first five companies specialized in risk insurance sector own a market share of 35,9%. The first three companies that practice life insurance activity share 57,7% of the sector. This concentrating tendency occurs in other Central and Eastern European countries as well", the President of INGO Ukraine, Igor GORDIENKO, stated.
In the same time, according to the premiums per inhabitant, Ukraine is left behind by Europe. " For instance, in Poland, this index is EUR 165, in Germany is about EUR 1.250, while in other EU countries it reaches EUR 2.000. Meanwhile in Ukraine, premiums per inhabitant are only EUR 50", Igor GORDIENKO mentioned.
Also, the President mentioned that, according to experts' evaluations, the increasing rate of the insurance market will raise in the next three years by over 20%, while in life insurance case this dynamic will reach 70%. This scenery is based on the positive forecast for the economic development and on the low level of insurance entrance comparing to the potential demand for these services.
by irina.galasanu@mxp.ro, 6.03.2007

FSIS inspection official detained for extortion of a million-ruble bribe
Law enforcement bodies of Russia have recently detained Alexander MIRONOS, Chief of Department at Federal Service for Insurance Supervision (FSIS) Inspection in Central federal district (CFD). He is suspected for extortion of several millions rubles bribe from insurance company RESO-Guaranty in exchange for concealment of insurer's inspection results.
Igor IVANOV, RESO-Guaranty Deputy CEO, has confirmed to ASN that one of the high-ranking officials of FSIS inspection in CFD has extorted a bribe from his company.
According to anonymous FSIS's employee, Alexander MIRONOS was detained at his workplace in FSIS building. Other anonymous representative of supervision has informed that detention was made with FSIS assistance.
FSIS's head, Iliya Lomakin-RUMYANTSEV, declared that the supervisor's management was well informed about the situation. "We've reacted to this situation as state employees should act according to the law. The law demands stopping officials' illegal activities. We have no right to be strict with insurance business players if state employees do not strictly obey the law".
Detention of MIRONOS is not the first case of bribery among supervision's officials. In March 2004, Boris KUZNETSOV, former head of FSIS Vladivostok interregional inspection was sentenced to seven years in strict regime colony for receiving of Rub 600,000 bribe from IC PYRAMID.
At the end of January 2007, Alexey ZUBAKOV, former head of Insurer's Association of Russia was conditionally sentenced to three years for fraud. He took USD 30,000 from two applicants and promised to receive two FSIS licenses. According to ZUBAKOV, he has given the money to Galina AKSENOVA, Deputy Chief of FSIS preliminary control department, who should have assisted in license issue. FSIS official, as witnessed in court hearings, denied any connections to ZUBAKOV.
by ASN, 7.03.2007

Increased insurance for body persons
Sales of insurance products for natural persons for the last four years have increased in Russia 9 times, and it reached USD 5,4 mld in 2006, in total amount of the insurance premiums collected by the companies, according to rating agency EXPERT Ra.
Such a rapid growth is explainable by the introduction of MTLP insurances, one of the most developed kinds of retail insurance at the moment. They are followed by property insurances(apartments and the country real estate) and also liability insurances .
Concerning life insurance sector, is still expected a splash in demand for insurance products. At the moment new western players are entering these markets, using the channels of sales that are not widespread yet in Russia, such us Internet and direct sales.
According to the international association of insurers LIMRA, from 2005 to 2010 it is expected an important increase in share of sales for life insurance through the Internet from 3% up to 7.7 % and through direct sales from 5.5% up to 7.1%.
Average expenses for sales through agencies are estimated at 37 dollars, Internet-sales - 1.2 USD. The subsequent service of contracts through an agency network - USD 19, through the Internet - USD 0.45. The main part of policies are still sold due to the non - insurance intermediaries (banks, retail firms) and insurance intermediaries - agents and brokers, according to agency MERIDIEN Research.
In opinion of Paul SAMIEV, Director of Rating Department, EXPERT Ra, for the companies which possess essential investments and wish to win a significant market share , the Internet hardly becomes the priority channel of sales. " Yes, it is rather cheap, but with its help it is possible to make only very limited quantity of sales, SAMIEV marks . "In our country it is possible to expand this segment artificially, due to a series of scale advertising campaigns. But, there is always a risk, that the results will be appropiated by the concurrence".
by oleg.doronceanu@mxp.ro, 5.03.2007

Foreign reinsurers pointing Russia
Russian insurance companies are renewing their reinsurance contracts with partners from the Western Europe.
This are the conclusion of a recently study published by RP News line that included 64 reinsurance contracts completed by 28 foreign reinsurance companies with their partners from Rusia.
The main reinsurers of the Russian risks are the West-European companies - this group being represented by 13 companies. Bermuda market is presented by 5 participants, and London by 4 underwriters. Further follows the reprezentatives of USA, and only one company from other countries like Japan, Turkey, Latvia and Poland.
As well as one year ago, important companies as HANNOVER Re, SCOR, SWISS Re and MUNICH Re.have kept their leading positions after the number of the contracts renewed this year.
by oleg.doronceanu@mxp.ro, 5.03.2007

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