No. 84, May 17th, 2007

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FIAR 2007 - International Insurance - Reinsurance Forum


Cinderella's potential

Although the capital - being already a saturated market - will be for a while the main star, the forecast shows that the future of the Romanian insurance development will belong to the hardworking "Cinderellas" in territory.

I can certainly state this, also because of April ending of the first stage of the national programme "Where To Insure Myself?" - consisting of visiting the main insurers and brokers in each Romanian district - has let me realize the potential and the problems of the territory.

Potential does exist and it will be exploited. It is given by low penetration level, competition lack on the retail market (excepting MTPL insurance) and by real need of protection, which, sooner or later Romanians will assume.
At the same time, there are risks which can be outrun. These are generated by low buying power, unawareness of the potential clients, human resources crisis, generation change, professional forming deficiency and also by lent economic evolution.

But all these facts are weaker in front of province assets: a low damage rate - given by the know-how concerning the corporate clients, a better assumed risks selection - given by the knowledge of realities, a bigger efficiency - given by a higher level of relationship with local economic groups.
As the increase of the market will refer to the province, its development will consider the retail part and the direct relationship with the individual clients, on the corporate sector the market being already divided.

So, who is going to be the first to enter the lists?

by sergiu.costache@mxp.ro

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BCR Asigurari de Viata


OMNIASIG Asigurari de Viata


Interview with Dumitru Mugurel CERACEANU,
President - General Director,

XRIMM: How do you see the Romanian insurance market's evolution of the last decade?
Dumitru Mugurel CERACEANU:
In general, the Romanian insurance market was on the macroeconomic development trend between 1997 and 2006. The constant of this period is the change and the dynamism of all fields, without exception. The last decade has registered major changes in the following fields: legislation and legislator, number of players, business figure, portfolios' structure, capital, types of policy, indicators' evolution and so on. Nothing has remained unchanged. Through the Newsletter of the Ministry of Economy and Finance, OSAAR published for the first time the 21 pages Annual Report for 1997.

The Report of Insurance Supervisory Commission for 2005 had 111 pages. Shortly, the gross written premiums in 2006 comparing to the cashed premiums (important indicator at that moment) grew 44 times, life insurances over 140 times and general insurances over 35 times, out of which motor insurances got up 91 times. The amount of paid claims increased 37 times, cession into reinsurance almost 110 times and the social capital about 200 times. These are only some figures which hide realities, modalities, phenomena and efforts. The enhance of the period 1996 - 2006 was over 100 times as regards the volume of premiums taking into consideration that 1997 doubled its results comparing to 1996 (the inflation was 151.4% in 1997). The changes were both structural and as content. Not only has the decade registered evolutions, but also similarities and even comebacks.

Thus, in 1997 there were 55 insurance companies, among which 44 were operational comparing to 43 companies in 2005, among which 42 operational. While 1997 was the first year when household insurances weren't compulsory, look, in 2006 and 2007 they made the effort to reintroduce this type of insurances. During this decade even our national currency - RON - has become stabile, making more difficult a comparative analyze. Even so, the insurance industry got up from less than 0.5% of GDP to over 1.5%, life insurances increased from 8% to almost 20% of the total amount of insurances. The number of employees in insurance grew from 8.648 to over 14.000. They can comment on every indicator's evolution: assets, reserves, profitability, etc.

As a conclusion, they can appreciate the Romanian insurance market's evolution as being positive, marked by a special dynamism and registering a durable development. So, it's not about a percentage rate growth but a rank change. One can say: A decade as ten. Also it is worth being mentioned that starting with the 1st of January 2007, once the Romanian's integration in the European Union, a new decade began, following special evolutions of insurances.
With your permission I am going to nominate as representative to the last decade of the Romanian insurance industry the evolution of ASIBAN, which celebrated 10 years of activity in 2006, registering a 450 times increase in 2006 comparing to 1997, the first year of activity, and a market share up from 1.58% to 7.63%.

XRIMM: How do you see the Romanian brokerage market's evolution of the last decade?
Instead of commenting on this, I would prefer to emphasize that in 1997 the Annual Report of OSAAR didn't mention any brokerage company, while in 2005 the Annual Report of the Insurance Supervisory Commission mentioned 281 brokers and in 2006 their number seemed to pass 400. Congratulation and good luck! As for me, my expectations regarding the brokerage market's development are still high both concerning the quantity coordinates and qualitative coordinates. Together, the insurance and brokerage companies can be more powerful, more efficient and representative.

XRIMM: Which do you consider being the most difficult moment of the Romanian insurance market in the last decade?
It was the passing from the 57.3% market share held by ASIROM and ASTRA, companies with state capital, to 0 share market held by companies with state capital in 2006. Practically, there is no insurance company with a state capital entirely. In other words the most difficult moment was the change of shareholders.

XRIMM: Which do you consider being the main problems that the profile market is dealing with?
Indubitably, it is the European integration. There is a difference, a gap between European de jure and Romanian de facto. The extraordinaire dynamism of the Romanian insurance market, on a road without sufficient road signs, on the rapid globalization background, can cause conflicted problems within the field. Political problems and national, European and global macroeconomic problems can put a strain on the Romanian insurance market.

XRIMM: Which do you consider being the main development directions for the next year?
The next years' trend indicates a superior dynamism of the national macroeconomic rhythm, an increase of weight in Gross Domestic Product, the diversification of the policies, shareholder's changes, market concentration, higher competition, higher services' quality, brokerage, efficiency and so on.

XRIMM: Do you think that the development rhythm will continue to be the same in the next years? Give arguments please.
Yes, the increase rhythm of the insurance industry from Romania will bypass that of the national economy. The insurance weight in GDP is still too low. The Romanian economy is going to become more European, more international and global-phenomena, which taking in consideration the risks, compulsory involves the insurances. The insurance industry will register positive both quantitative and qualitative mutations as regards legislation, quality and diversification of products and services, efficiency, indicators' profitability and human resources. Concrete, there are premises for a durable development of the Romanian insurance market. Personally, I am waiting for a work typhoon as to modify the optimistic and positive strategic visions into Romanian realities.

XPRIMM: Thank you!

by daniela.ghetu@mxp.ro

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Dumitru Mugurel CERACEANU
Mr. Dumitru Mugurel CERACEANU,
President - General Director,


CEC remains in public ownership in 2007
The National Savings Bank (CEC) will have a development strategy focused on financing the business environment, Varujan VOSGANIAN, Minister of Economy and Finances told Mediafax.
"Next week, I will present, together with the new CEC Chairman - Radu GHETEA, the concept for the CEC strategy. We want a stronger focus on the Romanian business environment", VOSGANIAN explained.
CEC's President and two Vice-Presidents were replaced on Friday and the President office, held by Eugen RADULESCU, was proposed to Radu Gratian GHETEA, President of Romanian Banks Association, who accepted the appointment.
GHETEA resigned from the position of ALPHA Bank Administration Board President, after having being appointed at CEC leadership. Also dismissed from CEC leadership were Vice-Presidents Vasile IFRIM and Gabriela TUDOR, without a decision to be made related to the persons to take over the vacant positions.
CEC will not be privatized in 2007, as the bank will focus on institutional development, supported by a major capital raise, the Economy Minister added: "CEC will remain a State-owned bank for at least another year. If we decide to privatize it in the future, the privatisation will be operated in a formula which benefits the national capital. There are already requests by Romanian employers' associations in this respect", VOSGANIAN mentioned to 'Cotidianul' daily newspaper. The Minister said he has opposed the CEC privatisation on grounds that National Bank of Greece and ERSTE Bank, which initially bid for the Romanian bank, did not agree with a mixed privatisation formula: one stake in CEC in bonds, one for Romanian investors and one for foreign capital.
by costi.boroda@mxp.ro, 16.05.2007

3.7% inflation rate in 2007
This year's inflation level will drop by 0.9% to 3.7% as against the previous forecast, Mugur ISARESCU, The Central Bank Governor anticipates.
At the same time, the National Bank of Romania (BNR) revised upwardly by 0.1% the expected level of inflation in 2008, from 4.1% to 4.2%.
The alteration of the prognosis for this year was explained by ISARESCU starting from the evolution of the inflation over the first three months, when the consumer price growth rate was by 0.66% below BNR forecast. He showed a rather high demand surplus was considered within the previous reports. "We have revised the inflation rate in 2007 downwardly by 0.9%, due to the significantly lower level of the inflation rate over the first quarter, also due to the decrease in inflationary expectations, the expected lower advance of administered prices and volatile price of foodstuffs", ISARESCU mentioned.
From among the factors that led to better performances, there is the impact on prices triggered by the common agricultural policy and by the common customs tariff, by the reduction of fuel prices and by the appreciation of the national currency.
The political strains have not generated, until the time being, negative elements in the foreign exchange and monetary markets, but they continue to pose risks in relation to the anticipations regarding inflation. "I have not seen negative elements so far in the foreign exchange market or in the monetary one, induced by political strains", ISARESCU added.
by costi.boroda@mxp.ro, 7.05.2007

European Investment Bank opens office in Bucharest
The European Investment Bank officially opens its office in Bucharest on June 7, institution officials confirmed for HotNews. As of that date, preparations for the new European programmes addressing the infrastructure and small and medium enterprise sectors will enter the finish line. The more substantial involvement of the EIB in Romania was agreed late last year, with the signature of a memorandum under which the institution will finance projects in Romania up to EUR 1 billion per year. The opening of the Bucharest office of the European Investment Bank is the key element for the launch of two European programmes: JASPERS (Joint Assistance in Supporting Projects in European Regions), which will provide assistance in large-scale infrastructure projects, and JEREMIE (Joint European Resources for Micro to Medium Enterprises), which involves financing schemes for the SME sector.
by costi.boroda@mxp.ro, 10.05.2007

Economic growth, 7% in 2007
Based on the January-April results, the Ministry of Economy and Finance (MEF) forecasts an economic growth of 7% in 2007, up 0.5% from original predictions.
The economic surge and the budget execution during the mentioned period show that Romania could close this year with a budget deficit of under 3%, the Economy and Finance Minister Varujan VOSGANIAN, stated.
In terms of the new GDP estimate for 2007, talks are underway between representatives at the National Institute of Statistics (INS) and the National Commission of Prognosis, and the forecast relies especially on the growth registered by the industrial output and the construction sector.
The January-April state budget revenues totalled RON 14 bln, and spending, RON 16.7 billion. The state budget deficit was offset by the surpluses reported by the other budgets. Also, the MEF official affirmed that the 2008 budget could stand reductions, with social security contributions likely to be lowered by 6% next year. He did not specify whether the cut would apply to employees or employers. VOSGANIAN also said that VAT earnings could raise by 2 per cent GDP, through better tax correlation.
by costi.boroda@mxp.ro, 10.05.2007

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The Money Channel


The insurance market - EUR 2 billion in 2007
The total volume of underwritings on the Romanian insurance market, in the first trimester of 2007, has reached, according to the preliminary data, to RON 2,227 million, which means more than EUR 670 million.
"We are talking about a market that has all the chances to exceed this year EUR 2 billion. This is a achievable figure, if we take into account the results of the first trimester of 2007", Angela TONCESCU, the President of the Insurance Supervisory Commission has declared.
The structure presents an 80% general insurance segment, that has grown by 37% by comparison with the previous year and a life insurance segment that has grown by over 60%.
The credit insurance segment can also be highlighted, in which the gross written premiums' volume have exceeded by far the market's average (growth of over 133%). This thing had as consequence the growth of the credit insurance class in the total underwritings volume, from 4.9% in the first trimester of 2006 to 8.4% in the first trimester of 2007.
The claims have exceeded in the first three months of the current year RON 790 million, which means EUR 240 million. By comparison with the previous year the claims paid have risen by 35%. By the total volume of claims paid, over 95% of these were supported by the general insurance segment, from which 78% are motor insurance claims.
by mihaela.circu@mxp.ro, 11.05.2007

A decade like ten
"In Europe there is no similar event like FIAR (The International Insurance-Reinsurace Forum), with such an original component; therefore I consider that an event like this is absolutely necessary", Dumitru Mugurel CERACEANU, President - General Director of ASIBAN declared.
The company is supporting, as Official Partner, FIAR and it is the Welcome Cocktail Host, which will take place in the first evening of the most important European insurance event of the spring.
"Romania was accepted in the EU with a great dowry and FIAR is part of it. If, till now, there were 'only' nine Romanian editions, I'm sure the number of the European editions will be endless", added the stated official.
ASIBAN is one of FIAR Traditional Partners. ASIBAN, which celebrated, last year, 10 years of activity, has subscribed, in 2006, 450 times more than in 1997. The company's market share has grown from 1.58% to 7.63%
FIAR 2007 will take place between May 21st and 25th, 2007, at Sinaia.
Click here to see the participants list!
Click here to access the event's official webpage!
by mihaela.circu@mxp.ro, 11.05.2007

Private pensions - on highlight at FIAR 2007
Year 2007 will mark the private pension system's inauguration - moment that brings numerous challenges to the players involved in this system. Also, this will lead to significant changes on the Romanian financial markets.
In this context, The Private Pensions Day, an internationally event held by FIAR 2007 - The International Insurance-Reinsurance Forum, is mainly dedicated for debating practical aspects that have the most impact on the companies that enter the private pension market.
Mediator of the meeting, Crinu ANDANUT, the General Manager of ALLIANZ-TIRIAC Pensii Private, traditional Official Partner of the event stated: "We are looking for dialog, thus all the issues that leads to serious question marks about our future activity should be solved as soon as possible in a reasonable manner. Beside our business interests, we are aware to the fact that as first comers we have the most important role - of creating the market. That is why we constantly support the initiatives that can lead to this objective".
The debates' efficiency of The Private Pensions Day will be assured by the active support of The Private Pension System Supervisory Commision represented at the event by a multidisciplinary team lead by Mircea OANCEA, the President of CSSPP. Specialists from The Ministry of Economy and Finance are also invited.
And because, inevitably, the Romania's new status will mark the development of the private pension system, we will dedicate a section of the meeting to the newest trends present on the Europeans private pensions markets.
by daniela.ghetu@mxp.ro, 11.05.2007

The 23rd of May - Motor Insurance Day at FIAR
The motor insurance stake in the total insurance market exceeded 54% in 2006, meaning more than 65% of the general insurance segment. Their leading position has also the disadvantage of being a great risk factor for the market destabilization.
Thus, the 23rd of May, the third day within FIAR-The International Insurance Reinsurance Forum, is dedicated to the motor insurance. This occasion will bring in discussion issues regarding the past, present and future of the motor insurance market in Romania and will approach the most actual problems the local market is facing, the first one being the claims rate at highest levels ever.
Ionel DIMA, Director at AVUS Romania is the moderator of the Conference.
Among the speakers we name Ioan MATEI, Juridical Director within BAAR - Romanian Motor Insurers Bureau and FPVS-Street Victims Protection Fund, Ovidiu CIOBANU - President, FPVS, Nicu CRACEA - Chief Commissary, Traffic Police Department within the Ministry of Interior and Administration Reform, Richard NATHSCHLAGER - Executive Vice President, AUDATEX, Gheorghe ANGHEL - General Manager, EUROTAXGLASS's Romania, Maria BOGHIAN - President of ANSDAR-National Association of Automotive Dismantling and Recycling Societies and other market specialists.
The event will host leaders and specialists in the motor insurance field within the principal foreign and Romanian insurers, as well as services, claim adjusters and mass-media representatives.
by irina.galasanu@mxp.ro, 08.05.2007

FIAR, 24th of May - Private Health Insurance Day
Private health insurance posted the biggest growth in the insurance market in 2006, with gross written premiums growing up 208% to EUR 9.77 million, according to Insurance PROFILE Review.
Although this underwriting volume is pretty low, if we consider the estimation at the end of 2005 then the private health insurance segment has a significant growth potential, confirmed by the increase in the number of interested companies and also by previsions which say that by 2010, this market will reach EUR 150 million.
The recent debates at the Parliament Palace happened with the National Conference of Health Insurance occasion emphasized that private health insurance products are the only real solution for vivifying the Romanian health system.
In this context, Thursday May 24th, 2007 within FIAR-International Insurance reinsurance Forum is dedicated to the Private Health Insurance.
The Conference, organized in two main sessions, will take place at FOISOR Palace in Sinaia, and will approach two principal issues: first, pointing up the present condition of the health insurance market by identifying the potential and real benefits and second, the operational issues in private health insurance activity.
The event will host leaders and specialists within the principal foreign and Romanian insurance and brokerage companies, CNAS (National House of health Insurance), ISC (Insurance Supervisory Commission), Specialty Commissions within the Parliament, County Houses of Health Insurance, private medical services providers and mass-media.
by andreea.ionete@mxp.ro, 09.05.2007

Solvency II - strategic objective
ISC (The Insurance Supervisory Commission) Council approved on May 8th, 2007 the Commission's Strategy for 2007-2011 year period. The strategy's main objective is the Romanian insurance market's consolidation and development and also the increase of ISC's role on a national and European level by taking full advantage of the EU membership status.
"We intend and we will work very hard for this Strategy not to remain only on paper, but to be truly implemented and to fulfill the main objective. Thus, periodical evaluations will be made to analyze the stage of the Strategy's implementation and proper measures will be taken to correct the course towards the main objective", Angela TONCESCU, President of ISC, stated.
"I want to emphasize the priority the importance of one of the strategic objectives, respectively the supervisors' philosophy, because it is an absolutely mandatory preceding stage for the implementation of the future Solvency II system. This system consists in a transition from administrative like measures to actions based on principles", the cited official mentioned.
The strategic objectives identified by ISC can be grouped in three categories: the institutional capacity's increase, the change of supervisors' philosophy from one based on "accordance" type with one based on risk evaluation and to redefine the ISC's role and status into the EU's commissions and specialized committees of the European Commission and also of the IAIS (The International Association of Insurance Supervisors).
The priority of this objective comes from the fact that on July 10th, 2007 The European Commission will adopt the framework Directive of Solvency II and, based on the time schedule, in 2012 the Directive will be in force.
by mihaela.circu@mxp.ro, 09.05.2007

RON 19.1 million written premiums for AVIVA
The first quarter of 2007 meant for AVIVA Life Romania an increase of its volume of gross written premiums with 30.45%, to approximately RON 19.1 million (EUR 5.82 million), compared to RON 14.64 million (EUR 4.46 million) in the similar period of 2006.
The total value of the company's assets amounted to RON 164.7 million (EUR 50.19 million) at the end of March through an increase of 56.95%.
The AVIVA's investment programs had a similar positive evolution in the first three months of 2007, Practic MAX (launched on February the 1st, 2006) having the most important increase. The program had, in the first 12 months from its launch, one of the best development on the market, with an 18.33% increase, outpacing BET index in the similar period with 4.34% percent points.
"The results registered in the first quarter of 2007 were in line with our initial estimations. We are pleased of the current outcome, considering the important changes that we are facing at an organizational level for us to be able to successfully enter the private pension market. We do not analyze our company's performances only just by the first quarter of 2007, but we try to focus on a long term development. We are certain that, in short time, Romania will become the second most important insurance pension market in the Central and Eastern European private pension market, after Poland", Shah ROUF, CEO, AVIVA Life Romania stated.
Concerning the private pensions, AVIVA was licensed in April to activate as an administrator of private pension funds (IIIrd Pillar).
At this moment, the company is waiting for approval from the Private Pension System Supervisory Commision (CSSPP) for "Pensia mea" - a private pension fund, to step into the operational phase of the project.
"We are prepared to advance into real action! If until now we have tactically prepared the private pension project, now we are eager to put it into practice. We estimate to sell the first private pensions starting with the middle of May by using a selling force comprised of 2,000 marketing agents. The first targets will be the big companies that are already in our portfolio. 1,200 marketing agents are in process of licensing by the CSSPP for full time jobs and another 800 for a part-time jobs", the cited official mentioned.
For the IIIrd Pillar, AVIVA will administrate one moderate-risk pension fund. In parallel, the insurer started the licensing procedures of an IInd Pillar private pension company, by filing at the beginning of this month the authorization request, according to Law no. 411/2004. Thus, AVIVA Life Romania becomes one of the first company that puts into action its developing plans for IInd Pillar.
by irina.galasanu@mxp.ro, 10.05.2007

Insurance Brokerage, debated at Sinaia
The year 2006 means for the Romanian brokerage industry an increase of the mediated premium volume with 40%, the domination of the motor insurance and of the brokerage companies specialized in leasing related mediation insurance, but also an increase in business in total insurance market with 1% reaching 20.35%.
According to Insurance PROFILE, the first 10 brokerage companies have almost 54% of the market share. The cumulated value of the mediated premium of the mentioned companies excelled EUR 178 million, with over 50% more than in 2005 and with over 10% more than the growth in the European currency recorded for the whole market. In this context, on Tuesday, May 22nd, 2007 will be organized - part of FIAR - The International Insurance Brokerage Conference.
At the event will be present the leaders and the specialists of the insurance and brokerage market, representatives of the Insurance Supervisory Commission, of the National Union of Insurance Brokerage and Consultancy Societies and of the press.
by irina.galasanu@mxp.ro, 11.05.2007

ISC talks with territorial insurers
The Romanian Insurance Supervisory Commission (ISC) has organized a meeting, on 10th of May, 2007, in Cluj-Napoca, between the insurance market, local public administration and mass-media representatives, as well as businessmen from North-West region.
The event was part of the manifestations series organized by CSA with regard to the Anniversary of 15 years of Romanian insurance supervising, being, at the same time, the first direct territorial contact of such wide scope.
Thus, ISC, UNSAR (The National Association of Insurance and Reinsurance Companies from Romania) and UNSICAR (National Union of Insurance Brokerage and Consultancy Societies from Romania) discussed with the leaders and specialists of the local insurers and brokers.
"The role brokers have will become more and more important", Angela TONCESCU, President of ISC had declared with this occasion.
"The regional and especially central region market's realities are very different from what wee see in Bucharest", the insurers at the event emphasized.
They dignified the need of ditching the sale politics based on marking up the premiums.
PRIMM Insurance&Pension Magazine has been represented at CSA's event by Sergiu COSTACHE, General Manager of the most popular specialized publication, who asserted the importance of Cluj County in the Romanian insurance market.
Thereby, the second stage of the "Where To Insure Myself?" National Program initiated and coordinated by PRIMM Magazine, will also start with Cluj, in June 2007.
Gross written premiums posted in Cluj in 2006 amounted to 4% in the total insurance market. Thus, the county had the biggest stake in the total underwriting in Romania excluding Ilfov county and Bucharest.
by mihaela.circu@mxp.ro, 11.05.2007

ERGO enters Romania
UNICREDIT's Board of Directors has approved a framework agreement between UNICREDIT, MUNICH Re and ERGO to extend the existing co-operation in Germany, Austria and Poland to further growth markets in the CEE region.
ERGO, the insurance unit of MUNICH Re, posted gross written premiums revenues of almost EUR 17 billion in 2006. The extended co-operation focuses on the development of the distribution of both life and non-life insurance products of ERGO through the branches of the UNICREDIT subsidiaries operating in Romania, Slovakia, Slovenia, Hungary, Russia and, partially, Poland where co-operation with Bank PEKAO's existing partner will continue.
In the medium term, the same type of co-operations will also be extended to Serbia, Ukraine, Bosnia and the Baltic States. In this context, Munich Re and ERGO will set-up a centralized hub for the supply of cost efficient and effective services to support local operations.
With this agreement the two Groups aim to implement a long-term partnership and create value for both parties ensuring high quality standards for their clients.
by andreea.ionete@mxp.ro, 11.05.2007

GENERALI enters the private pensions market
GENERALI intends to soon enter mandatory private pensions system, as a private pension fund administrator.
In the very next period, the company will do the necessary documentation as to request authorization by CSSPP (The Supervisory Commission of the Private Pensions System) for the establishment of a new pension society, named GENERALI Pension Fund. The second stage in the authorization process is applying as a private pension administrator.
The new Project Manager for the mandatory private pension activity within GENERALI is Ioan VREME. Insurance specialist Ioan VREME worked in the last 12 years within insurance company BT Asigurari in leading positions: IT Director, Life Insurance Director and, in the last eight years, he was Deputy General Manager.
The official declared he is ready to establish a new company with the help of his experience in insurance, as he developed along with BT Asigurari since the very beginning of the companies' activity in the insurance market.
"I'm already preoccupied in building up a new team for GENERALI Pension Fund, because we must be prepared and we have to face the calendar of the systems' implementation. We do not want to overawe through our employees number but through their professionalism, as efficiency will be the key-word. Taking advantage of the GENERALI global experience in pension funds administration, we aim to reach similar positions in Romania as the Italian Group has in countries like Poland, Hungary, Czech Republic and Slovakia", Ioan VREME said.
by mihaela.circu@mxp.ro, 10.05.2007

The Romanians prefer the risk
"Until the end of this year, the Guaranty Fund will become a reality of the private pensions market", Crinu ANDANUT, The General Director of ALLIANZ-TIRIAC's Private Pensions company (SAFPF) stated with the occasion of an informal meeting with the journalists from the economic media.
"The four operators, already authorized for the administration of the voluntary pensions, have decided to go on with all the procedures in order to create the Fund as soon as possible.
The brands' reputation, the financial strength, the team's quality will be, at least in the first instance, until the results of our activity will grant us with the proofs of the quality of our products and our competence, the basic arguments we will show to our clients. Furthermore, the existence of the Guarantee Fund will represent a factor of increase of the public's trust in the solidity of the investment in a pension fund", the company's official has added.
Talking to the journalists present at the event about the future intentions of the first private pensions company authorized in Romania, Crinu ANDANUT has added: "Apparently hard to conceive, the results of a market search made by ALLIANZ-TIRIAC to it's customers all over the country have revealed the fact that our audience has a much higher appetite for risk than we had expected, preferring investment products with a high possible revenue, even if it also means a greater risk".
Dorin BOBOC, the Head of Investment of ALLIANZ-TIRIAC SAFPF, has added a couple of explications: "Our role, in this issue, will be one of a market opener. The public must be educated in order to understand correctly the level of financial risk associated to this type of investment. Only this way our clients can make a good decision and we will receive an over-average degree of enrolment and retention in the private pension funds. We have thought the products that we are going to launch as to offer all the options possible: from AZT Adagio, a pensions fund with a conservatory character and with a main objective of conserving the value of the contributions, going thru AZT Moderato, a private pensions fund whose assets will be invested in a proportion of about 25%, in financial instruments with conserving the value of investment, till AZT Vivace, the private pensions fund with the highest ratio, for which we will go up untill the very limit of investment in this type of products".
by daniela.ghetu@mxp.ro, 08.05.2007

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Private pension funds in Russia may get EUR 5.7 billion market capacity

With the effect from January 1, 2008, the Russian pension system may get a new element - additional pension savings (APS), FundsHub.ru reported on May 3 referring to Russia's president Vladimir PUTIN.
The APS mechanism is likely to use the same payment collection and accounting method as the already existing system of compulsory pension savings (CPS) but to have its own financial source from the Fund of National Welfare, FundsHub.ru believes.
When entering the APS system, each citizen must choose a provider for investments from three types of companies - state management company, private management company or non-state pension fund. The government will develop an additional law regulating payments. It also seems to be useful to give an opportunity to the citizens to choose how to use their pension capital (life and term annuity, rent, medical treatment, improvement of living conditions, small-scale business) and a provider (Pension Fund of Russia, non-state pension funds, insurance companies, banks).
As regards non-state pension funds, the APS mechanism makes voluntary pension insurance less attractive. It will become a service for rich people who can assign over EUR 29 a month. On the other hand, non-state pension funds will get a new market with a greater number of participants (there will be no age restrictions) and lower costs for attraction of clients as compared with the compulsory pension insurance market. Moreover, citizens will be able to pay from all types of personal income, not only from official sources of revenue. For reference, the average volume of the compulsory pension insurance market is EUR144 a year per capita and has several million of clients. The amount of the APS market will total EUR 576 per capita (EUR288from personal income and EUR 288 from the Fund of National Welfare) and the number of participants will at least double. As a result, the capacity of the APS market will be 40-50 times higher than the capacity of the compulsory pension insurance market. In 2008 the starting volume of the APS market may amount to EUR 5.7 billion.
by RP Newsline 07.05.2007

CESKA Pojistovna's rating - under review
MOODY's Investors Service has placed the Baa3 insurance financial strength rating of CESKA Pojistovna, the largest insurer in the Czech Republic, under review for possible upgrade.
The decision follows the recent announcement of a proposed joint venture with Italy's GENERALI Group to create a leading Central and East European insurance group. Other factors are the improvement in CESKA's results and financial position in recent years, MOODY's said.
The joint venture would combine the insurance businesses of the PPF Group N.V., including CESKA, with the CEE operations of GENERALI. MOODY's declared that the joint venture, expected to be completed by the end of 2007, "has the potential to lead to further improvements in CESKA's franchise and credit profile".
"The good strategic fit between insurer's CEE insurance operations, enabling both parties to improve access to developing markets and distribution channels, as well as creating potential for cost synergies", MOODY's noted.
Czech insurer, based in Prague, reported gross premiums written of USD 1.86 billion and shareholders' equity of USD 830 million as of Dec. 31, 2006. CESKA also reported its net income for 2006 increased 79% to USD 401.3 million.
by oleg.doronceanu@mxp.ro 09.05.2007

SAVA Re acquires additional 12% of TABAK Insurance Shares
The Slovenian reinsurance company SAVA Re paid EUR 1.5 million to purchase another 12.41% of the Macedonia-based insurance company TABAK Insurance shares.
By this transaction, Slovenian reinsurer will control over 60% of shares in the Macedonian company portfolio, as Sava re has acquired in January a 50% stake in the same company.
"By this latest transaction, SAVA Re reaffirms its trust in the Macedonian company, thus denying the rumors published in some Macedonian media suggesting we are withdrawing from the Macedonian insurance market", says the Slovenian company's announcement.
SAVA Re is the leading reinsurance company on the Slovenian market, with a 55% share of the total bussines. The company wrote EUR 77.5 million in premiums and paid UER 48.9 million in claims during the first nine months of 2006.
Company operates in Central&Eastern Europe, in more than 16 countries, especially in Turkey, Czech, Greece, Serbia and Montenegro.
by irina.galasanu@mxp.ro 09.05.2007

FSIS has reported on Russian insurers' performance results in Q1/2007
In Q1/2007 Russian insurers (838 companies reported to FSIS) wrote EUR 5.4 billion in premiums, an increase of 23.4% compared with the same period in 2006, according to FSIS head Iliya LOMAKIN-RUMYANTSEV, concerning the market results.
56.7% of total premiums were collected in voluntary, 43.3% - in compulsory insurance segment.
Property premiums predominated in voluntary segment - EUR 1,7 billion (15 growth). The least premiums were wrote in "scheme-cleaned" life insurance - EUR 131 million (11.6% increase). In personal insurance, premiums have grown by 6.7% to EUR 1 billion. The best dynamics in voluntary classes was demonstrated by liability insurance - 19.3% growth to EUR 163 million.
At the same tine, in Q1/2007 insurance companies paid out EUR 2.7 billion in insurance claims. EUR 1.9 billion were paid in compulsory insurance including EUR 1.6 billon in "non-market" compulsory medical insurance (61% of total claims) and EUR 246 million in CMTPL. In voluntary insurance, the most claims were paid in property - EUR 483 million and personal insurance - EUR 266 million. Life insurance claims totalized EUR 51.5 million, liability - EUR 11.4 millions.
"Sustainable structure with comprehensive leaders continues to build up. Changes might occur in the leading group, but the main core of the Russian market has already been formed. 50 companies collect 80% of premiums and top 100 - nearly 90%", LOMAKIN-RUMYANTSEV commented, according to ASN.
No changes have occurred in top 10, however almost all companies switched places, except for ROSGOSSTRAKH (1st) and KAPITAL Insurance (8th place).
Second place is occupied by RESO-Guaranty (4th - year ago), third - SOGAZ (2nd), fourth - ROSNO (5th), fifth - INGOSSTRAKH (3rd), sixth - MILITARY Insurance Company (7th), seventh - ZHASO (6th), ninth - MAKS (10th), and tenth - SOGLASIYE (9th). Top 10 has collected 53% of total premiums.
By FSIS data, the State Register of Insurers included 913 companies as of March 31, 2007. However, FSIS forecast decrease in their number.
In particular, due to noncompliance with forthcoming requirement on specialization, nearly 80 out of 130 life insurance companies can exit the market till July 2007. Also, 112 out of 240 companies, operating in reinsurance, have no separate license for this class to be required from July.
Moreover, the supervisor has identified "interesting dependence", LOMAKIN-RUMYANTSEV said. "If in first quarter some companies do not operate in insurance, then it's quite possible that they will not even provide reporting in the next quarter. Mostly, this is the result of their exiting the market", FSIS head noted. In Q1/2007, 35 companies have not operated in insurance, 40 - failed to provide reporting.
Other FSIS forecast is positive: decrease in number of insurers will not lead to decline in premiums. By LOMAKIN-RUMYANTSEV's estimates, the Russian insurance market will pass EUR 20 billion threshold and will come close to EUR 22.8 billion in 2007 (the market wrote EUR 17.2 billion in 2006).
by irina.galasanu@mxp.ro 15.07.2007

EBRD acquires 10% of RESO-Guaranty
The agreement was signed by RESO-Guaranty Board chairman Sergey SARKISOV and head of business-group Financial Institutes and Authorized capital of European Bank of Reconstruction and Development, Kurt GEIGER, in Moscow on May 16, 2007.
The initial price of this transaction totalized USD 150 million, and might be corrected in light with possible future capital participation of other investors. The transaction is to be completed by the end of May, pointed Andrey SAVELIEV, RESO holding Board chairman. After that bank will appoint its representative in the RESO-Guaranty Board of Directors.
"This is the most important investment of the EBRD in a Russian insurance company and also the most significant investment into insurance sector in Bank history. We are glad to welcome the EBRD as a strategic financial partner in our company. I hope the Bank will render significant influence on the further successful development of our business. This is a sign of trust in the future prospects of development of the RESO-Guaranty, and the Russian insurance market as a whole, noted SARKISOV.
RESO-Garantia is a general insurance company and one of the leaders on the Russian insurance market. The company was founded in 1991, and is among the leading Russian players in the insurance industry in terms of written premium, and one of the leaders in retail insurance.
European Bank of Reconstruction and Development is an international financial organization founded in 1991. The institution became one of the largest investors in the countries of Central and the Eastern Europe, Russia and the CIS, with investments that exceed USD 44 billion.
by oleg.doronceanu@mxp.ro 17.05.2007

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