No. 81, April 5th, 2007

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FIAR 2007 - International Insurance - Reinsurance Forum


Health Insurance market – still a developing one!

According to Insurance PROFILE Review, the private health insurance market reached the amount of EUR 9.77 million (RON 34.44 million) at the end of 2006. If referring to the estimation of 2005 values, the increasing number of companies interested in this sector confirms the existing high generating potential of that small effective amount of written premiums.
At this moment, ten operators (ALLIANZ-TIRIAC, ASIBAN, ASIROM, AVIVA, BCR Asigurari, GENERALI, GRAWE, INTERAMERICAN, OMNIASIG Life and RAI Asigurari) act on this market sector. Besides, AIG Life will launch in the near future, in collaboration with MEDLIFE, two types of private health insurances forming the ASILife brand (ASILife GOLD and ASILife SILVER). Meanwhile the SIGNAL Iduna Group from Germany will develop new offers for the Romanian specific market in partnership with National Trade Union.

The companies offer multiple health insurance packages, the prices varying from EUR 10 to EUR 200 per month, depending on its specific, destination and complexity. The most sophisticated ones can offer even covering for investigations abroad, dental insurance or access to second opinion in or out of the promoted system. The latest player on this market is BCR Asigurari - a company that launched in February 2007, a special product, in partenrship with TPSH Insurance Brokers and AXA Krankenversicherung from Germany, emphasising the reinsurance ability and know-how supplying license.

In facy, the evolution of the market is also supported by the increasing existing demand on this sector. This way, according to the research initiated by INSOMAR at the Insurance Supervisory Commission request, over 67% of the respondents, not taking in consideration the age, sex or education level, consider private health insurance as being a useful fact.

The results of the survey are confirmed by Sorina NICULESCU, General Manager at SIGNAL Iduna Services, who states that "the market becomes more conscious of the advantages offered by the voluntary health insurance: the employees request and fight to include this type of insurance in the salary package, the employers become more receptive and the individual clients promote much more rational spirit during the evaluation of the received offers".
In the same time, even if it seems to be a cliche, we can not skip over the effects of the European integration process and the correlation of the mentality of the Romanian citizens to EU. That is why, when estimating the future of this specific market, we should look also "on the other side of the hedge". By this moment, over 10% of the EU citizen beneficiate of private health insurance and the increasing rate of the written premiums on this sector exceed the GDP's dynamics.
Extrapolating, "we can expect that Romania, in a couple of years will have over 2 million people owing health insurances in the private system", according to the forecast of Gabriel IONESCU, President of HR Club.

This optimism is also shared by Dan CONSTANTINESCU, Member of ISC Board, who states that "our expectations refer to the doubling of premium amount on this specific sector in a period of one - one and a half year".
In 2005, quoting a very interesting Roland Berger survey, the estimation for the next 5 years (n. red until 2010) concerning the Romanian health insurance market was represented by the value of EUR 50 million. Certainly, the market has potential, and the figures presented by the consultancy company can be excelled.
The context is indeed very positive. The increase of the population purchasing power corroborated with the constant and continuous deterioration of the services' quality offered by the Romanian public system of health will generate impulses for private health insurance development.
The problem of private health insurance and the level on the Romanian market will be debated during CNS - Health Insurance National Conference, event organised by Media XPRIMM and PRIMM-Insurance&Pensions Magazine; it will take place at Parliament Palace, on April 19, 2007, with the support of ISC (The Romanian Insurance Supervisory Commission), UNSAR (The National Association of Insurance and Reinsurance Companies from Romania) and UNSICAR (The National Union of Insurance Brokerage and Consultancy Societies from Romania).

by alexandru.ciuncan@mxp.ro

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BCR Asigurari de Viata
Club ARO
The Money Channel


Interview with Mr. Mihail TECAU,
President-General Manager
BCR Asigurari

XPRIMM: How do you appreciate the development of the private health insurance sector in Romania, since its beginning two years ago?
Mihail TECAU:
The private health insurance market in Romania is still at its beginning. However, the inefficient approach made by the state, the peoples' concern about health and the possibility to have access to good quality medical services, as well as the populations' income increase consequent on the economic growth within the last few years, are together the premises for the development of the private health insurance segment, despite its slower start.
In the same time, this development lens also upon the infrastructure of the medical units system.
At this moment, there are a few private medical centres, but there are also signals which draw our attention upon investing in such clinics, in the near future.
The number of private hospitals which provide its patients high standard medical services and accommodation conditions has also increased. This is where private health insurance interferes, because these products facilitate the patients' access in such centres, covering a wide range of costs.
The growing number of private hospitals and clinics will soon have effect upon the private health insurance demand, resulting in a more diversified supply on this particular market.
Thus, a lot of private initiatives have begun to outline. Above the simple offers for clinic tickets - a satisfactory solution only for ambulatory consultation and treatment - are appearing much more complex products as insurance companies, clinics and hospital began to cooperate.

XPRIMM: Which do you consider to be the main impediments against the private health insurance development?
The confusing and incomplete legal provisions now effective are the main obstacles that private health insurance sector is confronting with.
Law No.212/2004 regarding private health insurance has been abrogated by Law No.95/2006 regarding the reform of the health system. The effective legislation controls two types of private insurance:
Complementary private health insurance - a supplementary package added to the social insurance package (covers de medication and tests costs which are not paid by the public system).
Supplementary private health insurance - besides the social services package, one may buy a private insurance policy for growing the comfort level, covering the medical services needed outside the country.
After years of waiting, the Ministry of Health announced the order which regulates the private health insurance system has been signed.
If norms will suit the agreements between UNSAR (The National Association of Insurance and Reinsurance Companies from Romania) and the Ministry of Health then it will exist the premises for a fast growing private health insurance market.

XPRIMM: In your opinion, introducing deductibility for this type of insurance will lead to a rise of the underwriting volume?
It is estimated that almost five million Romanians could enter the private health insurance system, because deductibility will apply for all employees.
Through the deductibility for this type of insurance products, the authorities try to transfer a part of the financial responsibility of the public sanitary system towards private companies. This way, Romanians with big incomes are incited to turn themselves to the private health system in order to avoid low quality medical services provided by the public sector.
According to authorities, deductibility refers to "specialized insurance, deductible from both income tax and profit tax", as Eugen NICOLAESCU, the Minister of Health also declared. Even more, "persons with a private health insurance policy will pay EUR 200 less income tax and for companies this value will be deducted from the profit tax.
It is important to mention that the annual deduction applies also for private health insurance policies bought until now from insurers which sell these products.
Granting this deductibility stimulates the demand for health insurance, especially when we talk about companies which include the private health insurance in the benefits package for employees.

XPRIMM: How are BCR Asigurari's products different from your competitors'?
BCR Asigurari has recently entered the private health insurance market with a product named VIP.
Thus, in February, BCR Asigurari and TPSH Insurance Brokers have launched together a special and unique health insurance product, in cooperation with German AXA Krankenversicherung AG as reinsurer and know-how provider.
In the Romanian health system context, our new product is a real health insurance, with unlimited insured sum.
Owners of VIP have access to a wide network of specialists, doctors and hospital both in Romania and Germany, where insured patients are given the optimum medical treatment. They also benefit from the private-patient status which gives one the right to accommodation in one bed hospital reserves.
This product is different from other insurance products available on the market as it allows every doctor in Romania or Germany to use the most efficient treatment for the patient, without considering the costs, number, quantity or quality of the medical services, thus protecting the insured person against expenses related to outrunning one of these parameters.
Taking into consideration that a cord surgery intervention as well as post-operation treatment can surpass EUR 150,000, this product represents a new concept at the Romanian health insurance market level, as it doesn't have a maximum limit for the insured sum.

XPRIMM: What market segment is this product addressed to?
VIP is addressed to individuals with above average income, who give much attention to the superior quality of the medical treatments in hospitals or specialised medical centres. The insurance policy will cover the costs for medical treatments provided at a high level of professionalism and will give access to the newest medical practices in Romania and Germany.

XPRIMM: What are the quantitative objectives of BCR Asigurari in 2007 (sold insurance policies, written premiums volume)?
BCR Asigurari aims for strengthening its position within the private health insurance segment by adapting the supply to our clients' demands and, in the same time, by consolidating the relations with the medical services providers. Thus we will meet our customers' expectations and concerns regarding their health and their needs to beneficiate from high quality medical services.
We estimate 300 sold insurance policies, with a volume of EUR 500,000 gross written premiums.

XPRIMM: Thank you!

by mihaela.circu@mxp.ro

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Mihail TECAU
Mr. Mihail TECAU,
President-General Manager,
BCR Asigurari

ll International conference

Romania's GDP will rise by 10% until 2013
The European Commission expects a 10 per cent rise in Romania's Gross Domestic Product by 2013, Principal Administrator Regional Policy Directorate-General with the European Commission Charles WHITE stated in a seminar on "How to spend structural funds", ROMPRES reports. According to Director General with the Management Authority for the Community Support Framework (AMCSC) with the Ministry for public Finances, Razvan COTOVELEA, Romania's global objective is to achieve a 15 per cent GDP increase by 2013. Romania may thus recover approx. 10 per cent of its delay as to the European Union, reaching an 41% of the EU average, according to estimates carried out so far, presented in a EURACTIV report. As for the operational programs negotiated by Romania with the European Commission, COTOVELEA pointed out that none of them has been rejected, and two are to be approved by September 2007. White also explained that there were some concerns related to the motorway program in Romania as well as to the traffic in Bucharest, but these problems must be solved by the Romanian authorities, which should set their priorities.
by costi.boroda@mxp.ro, 2.04.2007

The mergers and acquisitions on the Romanian market will increase
The European mergers and acquisitions market reached its highest performance level in the last period totaling 5,216 transactions, worth USD 163 billion, PricewaterhouseCoopers analysts said yesterday, in a press conference.
The company drew up a study to determine the value of the mergers and acquisitions market in Central and Eastern Europe. The study includes private public transactions in 11 countries in the region, taking into account, for the first time, Romania. Transactions were performed through mergers between private partners, but also between state and private structures. The 11 countries comprised in the study, four of them not having yet acceded to the EU are: Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Russia, Slovakia, Ukraine and Serbia. The last two distinguished themselves through last year's transactions volume.
"The main reasons behind the increase in mergers and acquisitions volume derived from the companies' need to increase and diminish the impact of competition, and also to enter new external markets", Emilian RADU, Partner, Transaction Advisory Services, for PRICEWATERHOUSECoopers pointed out. According to the analyst, the mergers and acquisitions market in Central and Eastern Europe amounted to 12 per cent of the total European market.
The top positions of industries involved in transactions did not undergo dramatic changes, as 2006 had a similar structure with previous years. Manufacturing, financial services, the food industry, public utilities and the pharmaceutical industry remained the main fields where transactions took place in 2006. The most appealing sector from the point of view of financial efficiency was the real estate sector. The acquisitions of City Mall by the British Investor APN Funds Management, for USD 130 million, and that of Sema Parc by the Austrian fund EUROPOLIS (USD 113 million) significantly contributed to the total value of acquisitions. The public utilities sector attracted the biggest investments owing to the stock exchange listing of TRANSELECTRICA, as 11 transactions, each worth USD 113 million, were performed in 2006. However, the year's climax was the acquisition of BCR by ERSTE Bank for USD 543 million. In 2005, the VODAFONE-MOBIFON transaction accounted for approximately half of the Romanian acquisition market volume.
The number of privatizations increased, but their value dropped dramatically, according to the PwC study. Serbia, Russia and Poland totaled 78 per cent of the overall privatizations volume in Central and Eastern Europe in 2006.
" Mergers and acquisitions will be the driving force for economic growth in the future instead of privatizations", Radu STOICOVICI, Head of Transaction Advisory Services for PwC, declared. PwC analysts mentioned that Anglo-Saxon investors preferred Romanian and Bulgarian markets in 2006. Thus, out of a total of 43, 26 transactions were concluded by British and American investors in Romania, while the rest were performed in Bulgaria. Investment funds were major players on the acquisitions market in 2006. Out of 12 transactions, seven were accomplished through such funds.
by hotnews.ro, 2.04.2007

Non-governmental credit up by 3.2% to 95.48 billion RON in February
The non-governmental credit rose by 3.2% to 95.48 billion Romanian lei in February from the first month this year, according to the latest data delivered by the National Bank. Credits in RON rose by 3.9%, while foreign currency credits in RON equivalent rose by 2.5%.
Foreign currency credits for natural persons rose by 4.7% while those in Ron - by 1.5%. Foreign currency credits for companies rose by 1.2%, while those in RON - by 6.4%.
Compared to the similar period last year, the non-governmental credit rose by 55.2%, with a 64.2% growth of the RON component and a 46.5% growth of the currency component in RON equivalent.
by costi.boroda@mxp.ro, 28.03.2007

RAIFFEISEN Bank profits grow 22%
The Romanian branch of RAIFFEISEN Bank had a 53 million EUR profit after taxes (61.1 millions before taxes) at the end of 2006, representing a 22% compared to 2005.
The assets of RAIFFEISEN Bank Romania grew 35%, up to 4.1 billion EUR, making the institution the third largest bank.
The bank credits reached 2.02 billion euros, 42% more than in 2005, while deposits grew 38%, up to some 3 billion euros.
RAIFFEISEN Bank had at the end of 2006 2.2 million clients, including 4,700 large and medium corporations and 130,000 small and medium enterprises.
by costi.boroda@mxp.ro, 29.03.2007

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Seven for UNSAR

Starting with 22nd of March 2007, seven insurers became members of the National Association of Insurance and Reinsurance companies from Romania (UNSAR): AIG Romania, ASITO Kapital, BCR Life, FATA Asigurari, OMNIASIG, OTP Garancia and UNITA. Thus, the number of profile companies, members of this Association, is 24.
According to the data presented by Insurance Profile Review, the cumulated market share of the Association reaches 95,43% comparing to 78,6% in the previous year.
"UNSAR has increased its representation through these new members", Florentina ALMAJANU, General Manager of the National Association of Insurance and Reinsurance Companies from Romania declared.
The XPRIMM's editorial staff contacted the leaders of the new entered companies for a comment on this important event of the Romanian insurance market.
"OMNIASIG has joined in the UNSAR to have a constructive contribution in case the Association intends to do something for the market", Constantin TOMA, President-General Director of OMNIASIG, has declared exclusively for XPRIMM Newsletter.
"To join UNSAR is a normal phase in the company's development, representing a confirmation of the accelerated increase registered by our company in the previous years", Florina VIZINTEANU, President-General Director of BCR Life, considers.
In the same time "the affiliation to a professional organization with a high degree of representation was always UNITA's aim", Iulian DUMITRU, President and Executive Director of UNITA, has highlighted.
"The affiliation to a professional union is a normal thing for a company with the statute and importance of AIG", Mihnea TOBESCU, AIG's General Manager, believes.
"To join in an association of such importance for the Romanian profile market represents a reason for us being proud", Marcel PIRCIOG, General Manager of ASITO Kapital, has affirmed.
"Thus we wanted to emphasize our involvement in the development on long term of the Romanian insurance market", Iulian MIHAI, Deputy General Director Non-life, OTP Garancia has declared
According to sources from the market, others companies like AIG Life intend to become members of the professional union.
UNSAR was established in 1994 as professional organization, nongovernmental, apolitical, independent, nonworking character, created for the development, expanding collaboration and cooperation in the insurance and reinsurance field both on internal and international plan.
by mihaela.circu@mxp.ro, 23.03.2007

VIG in Romania - growth over the group's average
The companies owned by the VIENNA Insurance Group in Romania (OMNIASIG, OMNIASIG Life, UNITA and AGRAS) underwrote in the previous year almost EUR 237 million, which means a growth of almost 57%, in comparison to 2005.
Basically, the VIG companies in Romania have expanded their business by 40%, in comparison to the 17% average growth of the group in 2006. That growth can be translated to RON 100 million more than the results of 2005.
According to the results announced by the VIG Group in Vienna, the Austrian group has ended 2006 with a gross profit of EUR 321 million, with 34% more than the value registered in 2005. The underwritings in 2006 have grown by EUR 900 million, to a total of EUR 5.9 billion.
The contribution of the insurance companies owned by VIG in the CEE, in the total volume of underwritings of the group is of 38%. On the general insurance segment, 52% of the underwritings of the Austrian group come from the CEE. The gross profit achieved by VIG in Romania, in the previous year has been of almost EUR 3 million, which is equivalent to almost 1% of the profit achieved at the group level.
According to Insurance PROFILE Review, OMNIASIG has achieved a profit of EUR 5.47 million and AGRAS, EUR 0.27 million, while the other two companies have registered losses. Though the VIG representatives have not excluded a possible new acquisition in our country, they are not under negotiations at the moment for another takeover, Gunther GEYER, the CEO of VIG has declared at the press conference.
Be referring especially to Romania and Bulgaria, Gunther GEYER has affirmed that the perspectives of development are optimistic and "in 15 to 20 year these countries will know a similar development to the one present in Western Europe and this context is very favorable for the evolution of the insurance sector in these countries".
Furthermore, the company's official has declared that the agricultural insurance segment has a big potential and in this year a growth of almost 25% is expected by the group in Romania.
In the previous year, according to the Insurance PROFILE Review, AGRAS underwrote agricultural insurance of only EUR 6.18 million, in decrease of almost 40% in comparison to the results of 2005. Basically, according to GEYER's statement, AGRAS has as objective for this year a total volume of underwritings on agricultural segment of almost EUR 8 million.
"In 2006 we have made important steps towards the development of VIG in the CEE and Austria. We have achieved a grater market share on all the segments in Austria and in CEE we have extended our underwritings' share comparing to other international insurers. The evolution of the activity can also be seen in the financial result which has registered a strong evolution. This situation determines the groups' management to take into consideration a growth of about 25% of the dividends", GEYER has added.
by alex.rosca@mxp.ro, 29.03.2007

New players on the private pension market
The representatives of the Romanian Private Pension Supervisory Commission (CSSPP) announced that Romanian Commercial Bank (BCR) applied for a licence as a depositary of facultative pension funds at the beginning of March.
Between 1st and 21st of March, also in order to operate on the Pillar III, ING Life put in for the authorization of the second facultative pension fund and DELOITTE Audit for the appraisal as audit of these types of fund.
For the first fund, ING Life made the request for the appraisal in the same time with the request for the authorization as administrator of facultative pension funds as the legislation provides.
At present, according to CSSPP, the only authorized bank as depositary of facultative pension funds' actives is BRD - Groupe Societe Generale and ERNST YOUNG Assurance Services is the only financial audit for these funds.
by liviu.huluta@mxp.ro, 26.03.2007

Capital infusions of RON 435.32 million
The capitalization of the Romanian insurance market in 2006 grew at the end of 2006, to over RON 1.3 billion, compared to RON 876.66 million registered in 2005.
The insurers with the largest capital are ASTRA-UNIQA with RON 192.71 million, UNITA with RON 114.29 million, OMNIASIG with RON 103.24 million, ASIBAN with RON 76 million and ASIROM with RON 63.79 million.
The 50% capital growth of the insurance market players can be explained by the need to cover the losses on the motor insurance segment.
"About 90% of the EUR 130 million funds have been allocated to covering the losses of the previous years on the motor insurance segment, in order to maintain the solvability at the level agreed by the authorities", Cristian CONSTANTINESCU, the President of UNSAR (The National Union of the Insurance Companies in Romania) has declared.
by andreea.ionete@mxp.ro, 3.04.2007

Bucharest vs. Cluj - 1 : 0
Ioan VREME, known as Deputy General Director of BT Asigurari, a renowned insurance specialist, announced his leaving from the company after more than 12 years of activity on 27th of March 2007. According to his declaration, on the ground of his decision stay exclusively personal reasons, Ioan VREME intending to establish his residence in Bucharest (together with his wife and two children). He was involved in the majority of company's development plans on many activity fields: IT, actuarial- reinsurance, insurance analyze, life insurances, administrative, advertising and public relations.
According to the preliminary data of 2006 published in the Insurance PROFILE Review, BT Asigurari occupies the 9th position in the general insurances' top, with a 4.38% market share.
by andreea.ionete@mxp.ro, 2.04.2007

The most expected debut: Pillar II
The official debut of the Pillar II - the compulsory private pension scheme- was made in a press conference held by Gheorghe BARBU, Minister of Labor, Social Solidarity and Family, Sebastian VLADESCU from the Ministry of Public Finance, Mihai SEITAN, President of the National House of Pensions and Other Social Insurance Rights and Mircea OANCEA, President of the Romanian Private Pension Supervisory Commission on the 29th of March.
The four officials, personalities with a substantial involvement in the reform of the Romanian pension scheme, presented the main coordinates of the reform, its functional principles and the implementation calendar of Pillar II. Also, the beginning of the authorization process for the establishment of the functional structures of compulsory private pensions' market (operators, depositaries, audits and pension schemes) was announced.
"From our analyzes, Pillar II will totalize about 2.3 million members, over EUR 135 million administrated actives, meaning 0.14% of GDP, in 2008. We estimate that in the next three years, until 2011, the members will reach over 1 million", Gheorghe BARBU stated.
Being known that the amounts corresponding to the contribution to Pillar II will come from the present public system's contributions, the officials affirmed that the budget deficit from the public system will be covered by the state. "This deficit represents the cost of the reform's implementation, cost assumed by the state, being conscious that it's an investment. It will be covered through the finance of the consolidated budget deficit", Sebastian VLADESCU declared.
"It may seem an unbelievable affirmation from the part of a Minister of Public Finance , but this cost makes me happy because we all know that the future benefits will be important both from social aspects and from the contribution aspect on which the private pension market's development can increase the economy, as a whole", the official added.
"Private pensions pass from the solidarity approach to the introduction of the market economy in the pension field: we talk about property- the counts are the contributors' property-, profit - money is invested and capitalized through a professional administration, individualization - the prosperity at the retirement age depends in a great measure on the personal saving options through private pensions. So, in time, the existence of this complex pension system will have an important contribution to the mentality's change, to the education of population's entrepreneurial spirit. I am glad that finally, after long hesitations, we have succeeded in creating this project", Mihai SEITAN, known supporter of the pension reform and who had a major contribution to the promotion and practical creation of it, affirmed.
The announced calendar provides four months for the authorization process, followed by five months in order to join in one of the pension fund and to distribute the members as starting 2008 the first contributions to be made.
by daniela.ghetu@mxp.ro, 30.03.2007

EFG Eurobank invests in two insurance companies
The Greek financial group EFG Eurobank, the majority shareholder of BANCPOST, has invested RON 24.12 million in the establishment of two insurance companies in Romania.
The two entities, EFG Eurolife Asigurari Generale and EFG Eurolife Asigurari de Viata were registered in the Trade Register Office on the 16th of February 2007.
EFG Eurolife Asigurari Generale has a RON 11.23 million social capital, the majority shareholder being EFG Eurolife AEGA (Greece) with 85%, together with EFG Eurobank Egasias with 9,9% and EFG Eurolife AEAZ (Greece) with 5%.
As concerns EFG Eurolife Asigurari de Viata, EFG Eurobank Egasias will hold 9,9% of the RON 12.88 million social capital The main shareholder of the company is EFG Eurolife AEAZ with 85% while EFG Eurolife AEGA holds 5%.
Until now, important financial groups from Greece have shown their interest in the Romanian financial services market.
So, ALPHA Bank, ATE, EFG Eurobank, EGNATIA Bank, EMPORIKI Bank, NBG and PIRAEUS Bank hold an about 11% market share.
In the same time, NBG was one of the two finalists at the CEC's privatization. Greek companies hold shares also to insurers like GARANTA, NBG Insurance and ATE Insurance.
by andreea.ionete@mxp.ro, 26.03.2007

COFACE enters the insurance market
COFACE Austria Kreditversicherung AG, the credit insurance division of COFACE, has begun its insurance activity on the Romanian insurance market on April, and the main segment will be the credit insurance for local and external debts.
"The insurance of the credit risks for local and external credits is the principal COFACE Group's object of activity and starting now this service will be offered on the Romanian market", the representatives of the company has announced.
"We count on 15-20 clients in the first year, multinational companies and big national companies", Cristian IONESCU, COFACE's General Director, declared at the end of 2006.
COFACE is the only company which has notified its intention of opening a branch in Romania according to the establishment right.
by andreea.ionete@mxp.ro, 26.03.2007

Pillar III, functional from May
"May might bring at least 4 operators on the facultative pension market, which will administrate 5 pension funds, with contribution to the system", Mircea OANCEA, President of the Romanian Private Pension Supervisory Commission stated.
"As it known, ALLIANZ TIRIAC has already got the authorization as pension company, and it is on the point of getting the authorization as administrator of facultative private pension. In the next two weeks, other 4 operators will be authorized as administrators of facultative pension funds. Also, it's about to be authorized a new depositary", the official added.
The four companies which are about to be authorized as administrators of private pension funds are the Administration Company of Facultative Pension Funds ALLIANZ TIRIAC, ING Asigurari de Viata (2 funds), AVIVA Asigurari de Viata and BCR Asigurari de Viata . BRD- GSG is the first bank authorized as depositary, while ERNST & YOUNG Assurance Services and DELOITTE Audit are authorized for the audit activity.
The authorization period for Pillar III exceeded the public's expectations and ours. Let's not forget this is a pioneered action in Romania both for operators and Commission. In the last 5 months from the launch of authorization process, we've had plenty of discussions with operators regarding the procedures and the documents' content, defining many aspects.
I believe this phase has already passed and in short time we will have a functional market in this field, with a rich offer", Mircea OANCEA explained. He also added that" these 5 months represent a useful experience which will be used in the authorization process on the Pillar II. In consequence, we will carry on this phase in the proposed rhythm".
by daniela.ghetu@mxp.ro, 29.03.2007

The first pensions' scheme is...
The Council of the Private Pensions System Supervisory Commission (CSSPP) has granted the right to administer private pensions funds to ING Life.
Also, on this occasion, the first decision of authorization of a prospect of the private pension scheme ING CLASIC has been approved.
Therefore, after this approval, ING can begin advertising ING CLASIC. According to the CSSPP the administrators can collect the contributions of the participants and invest the funds' assets in the interest of the participants and beneficiaries in stock market instruments.
"This year, in may there could be about 4 players on this market, which will administer 5 pension funds", Mircea OANCEA, The President of the Private Pensions System Supervisory Commission has recently declared.
"It is a well-known fact that ALLIANZ-TIRIAC has already received the authorization to act as a pensions' specialized company; now, it has only to receive the authorization as a private pensions administrator. In about two weeks, another 4 companies will be authorized as administrators of private pension funds", the CSSPP official has added.
by liviu.huluta@mxp.ro, 3.04.2007

Heath insurance abroad for Romanians
The free circulation of the financial services has started producing the first effects in the private pensions field. The insurance companies usually offer thru a Romanian partner services with international coverage.
An good example is the company MEDIHELP International, a part of SOS Medical Group, the exclusive representative of GOODHEALTH Worldwide, BUPA International and SOS International.
About the benefits and possible disadvantages of the products, Antonio SOUVANNASOUCK, Managing Partner, ASIGEST has declared: "The national products momentarily cover only the minimum needs of the costumers, the market being at the beginnings of its development. Nevertheless there are much more complex policies which are already offered on the Romanian market. If the standards of the medical infrastructure of the country don't correspond to the requirements, the medical services can be offered in medical facilities abroad. In this context, the most frequent destination is Vienna". Needless to say that the supplementary benefits can be translated into higher prices.
Therefore is the case of the examples above, the initial purpose was to offer medical services at an international standard to the employees of a foreign company that work in Romania. Because of the fact that once Romania entered the EU, the foreign companies can now sell medical insurance policies also to Romanians. Nevertheless there are a couple of practical limitations. Antonio SOUVANNASOUCK explains: "The foreign companies close contracts of collaboration with Romanian medical clinics. I know the example of a British company that provides medical services thru two medical clinics situated in Bucharest. It is obvious that this small territorial coverage makes possible to address only to a small audience. In the case in which the necessary medical services are not available in Romania, the insured persons have the possibility of choosing a clinic abroad. But in this case, the travel costs are not covered by the policy which means new complications".
Therefore in order to fully-satisfy the needs of a large audience, the real solution is to develop the national services.
At the National Health Insurance conference all the important aspects of development of this segment of the insurance market will be debated.
by daniela.ghetu@mxp.ro, 29.03.2007

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Moldavian insurance market, up to 35%
According to the information provided by the Moldavian insurance supervisory authority, last year, the assets of the insurance companies from this country have increased by 40%, reaching USD 66.2 million.
The growth in the amount of the collected premiums by the insurance companies owes rather to the increased prices for services than to the intensification of the insurance activities and the market expansion. All in all, the premium amount increased by 35.23% up to USD 44.27 million, without taking into consideration the inflation, whereas the payments constituted USD 9.6 million (+57.7%).
The insurance companies' earnings increased by 38.72% last year, up to USD 4.34 million. The companies have expanded the sales of their financial insurance polices and also CASCO. Thus, the financial risk insurances increased by more then 50%, from USD 158.4 thousand, up to USD 256.4 thousand, and CASCO insurances, a growth of 60%, up to USD 7.52 million. Based on increasing sales of the new auto vehicles, the payments constituted USD 14.16 million (+ 17%).
According to Alexandru MUNTEANU, President of the Moldavian insurance supervisory authority, the increase of the amount of gross written premiums was determined, most of all, by the growing prices for the services. So, in January 2006, the compulsory insurances' prices doubled up, and the premiums increased only by 80%.
In the same time, the claims for property insurance raised by 76%, to USD 5.89 million, and the collections increased by 33%, up to USD 14,21 million. Property insurances in the agricultural sector have increased by 800%, up to USD 712.8 thousand. Life insurance sector has registered a growth of 41%, up to USD 1.71 million.
by irina.galasanu@mxp.ro, 30.03 2007

FORTIS, officially in Ukraine
The representatives of the insurance group FORTIS have announced their intention of entering the Ukrainian insurance market. FORTIS started its activity on the Ukrainian market at the middle of 2006, by taking over the ETALON Life for EUR 7.6 million and changed its name in FORTIS Life Insurance Ukraine on February 2007.
"Though at present the Ukrainian insurance market is not so developed, we believe it has an important development potential because of its volume, of the low insurance services' penetration degree and also because of the great perspectives at the macro economical level. We enter the market through an acquisition of an insurance company with a powerful distribution network, an efficient management and a great specialization on the life insurance market", Iacob WESTERLAKEN, General Director of FORTIS International Insurance stated.
The President of FORTIS Life Ukraine, Aleksandr KULESIN, appreciated that the FORTIS's resources will help the Ukrainian company to expand its presence in all regions of the country and to diversify its services offered to population.
"One of the company's priority of this year is to promote the life insurances dedicated to families for which we've already launched a marketing campaign", he emphasized.
The company intends to reach a 12% market share (4.5% at present) and enter among the first 3 life insurance companies. FORTIS is among the first 20 financial groups from Europe, with a capitalization index of EUR 42.1 billion ( on the 31st of December 2006) and opened branches in more than 59 countries and with more than 59,000 employees. It underwrote EUR 14.18 billion premiums in 2006, with 8% more than in 2005. The net profit from insurances registered a 15% increase comparing to the 2005, when it was EUR 1.42 billion.
by oleg.doronceanu@mxp.ro, 23.03.2007

International conference "Insurance Business in Russia: Integration Challenges", at the second Edition
The 2nd Edition of the International Conference on Insurance Business in Russia, event organized by the RUSSIAN Polis Information Group, will take place this year between the 16th and 17th of April 2007, at the Ararat Park Hyatt, Moscow, Russia.
The main topics of the Conference are: short-term objectives of the market regulation and development, development prospects of CIS insurance, investor Relations in insurance business, the role of international ratings in developing the Russian insurance market, IT as added value of insurance business, centralization and decentralization in insurance management, etc.
Among the invited speakers are top-managers and senior representatives of major Russian and international insurance and reinsurance industry, as Ilya LOMAKIN ROUMYANTSEV, Head of Federal Service for Insurance Supervision of Russia, Krzysztof STROINSKI, Lead Partner for Insurance Sector of Financial Services Industry in DELOITTE Touche Tohmatsu (Central Europe), Hannes CHOPRA, Chair of the Board, ALLIANZ Russia & CIS, Alexey ZOUBETS, Head of Strategic Marketing Department, ROSGOSSTRAKH Holding Company and many others.
The Official Partner of the Conference is ROSGOSSTRAKH, one of the leading insurance companies of the Russian market.
The PRIMM Insurance&Pensions Magazine is Media Partner of the Conference.
by oleg.doronceanu, 5.04.2007

About Russian insurance, in Vienna
As the economies of Russia and CIS countries develop, so does the demand for insurance.
Recent years have seen drastic developments in effective insurance legislation and supervisory authorities throughout the region. At the same time with the augmented product ranges and extent of investment activity the need of new capital is constantly growing.
This important questions and many others will be closely analyzed at the 7th Edition of the Annual International Conference Insurance in Russia & CIS, organized by MARCUS Evans, on 28 & 29 June 2007, in Vienna, Austria.
The Conference will offer an excellent opportunity for the assembled delegates from international and local insurance companies, brokerages, reinsurance firms, top investment banks and governmental institutions to review the key issues in the industry.
The 2007 conference will cover the following issues: legislation & regulation update throughout the region, integration of foreign companies into Russian & CIS markets as well as the expansion of Russian companies, needs and demands of a big corporate client and other vital interactive panel discussion with industry leaders.
The PRIMM Insurance&Pensions Magazine is Media Partner of the Conference.
by oleg.doronceanu@mxp.ro, 5.04.2007

New regulations on the Russian reinsurance market
Federal Service for Insurance Supervision (FSIS) will start implementing basic principles of International Association of Insurance Supervisors (IAIS) in supervising Russian reinsurance companies. This will affect requirements for technical reserves, assets and obligations compliance, as well as capitals.
The statement was made by FSIS head, Iliya LOMAKIN-ROUMYANTSEV at the reinsurance conference, held on March 29.
"Serious discussion on the reinsurance market's supervision will be initiated only after it becomes the real reinsurance market", ROUMYANTSEV pointed out. By FSIS estimates, this might happen next year. He also noted that situation in this segment changes as it gradually approaches to average European standards.
In the same time, FSIS estimates, 50% of Russian reinsurance is "not justified". "These 50% generate such results, which can't be regarded as satisfactory", ROUMYANTSEV noted.
At the moment, there are 30 specialized reinsurers and 291 insurance companies operated in the reinsurance market. Nearly 200 companies do not have licenses in this class.
These companies should "start worrying about receiving licenses or deciding to exit this market and terminate all client relations, without waiting for FSIS to take sanctions", FSIS head declared. He also reminded that in accordance to the Insurance Law, reinsurance operations without license will be banned after July 1, 2007.
by oleg.doronceanu@mxp.ro, 4.04.2007

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