No. 88, July 19th, 2007

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The Astonishment of the Big Employers

Surprisingly for the First Regional Private Pension Forum that took place in Cluj-Napoca was not the four times higher number of participants (officials, leaders and specialists from the operators, the media) compared to the initially estimated one, nor the significant attendance of the big regional employers at the event.

Truly unexpected from all of these was the awareness of a strong lack of basic information on this new domain, doubled by a real need of knowledge of the motivation opportunities of the human resources, offered by the pension system reform.

Practically, instead of taking part at the event in order to get the last details regarding the private pension system, the large regional employers' representatives realized they were just getting their first glance at the system and for the first time realized the first questions they should be asking.

Their amazement was noticeable during the breaks of the Cluj-Napoca Forum and convinced me that the didactical approach of the multi pillar system has to continue in other areas of the country and this is an imperative issue.

The conclusion can be only one: the success of the pension reform was, is and will be tightly connected with the quantity and quality of the communication with the targeted audience, a thing that must be done in a quick, complete and efficient manner.

P. S. The success of the triple event organized at Cluj-Napoca by Media XPRIMM - The First Regional Private Pension Forum - The "The Insurance Day" Conference - and the visits from the second cycle of the National Program "Where do I buy insurance?" ("Unde Ma Asigur?") determines us to continue this demarche, by organizing such manifestations in the large regional urban centers - Sibiu, in August, Iasi, in September, Constanta, in October and Timisoara, in November 2007.

by sergiu.costache@mxp.ro

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BCR Asigurari de Viata


OMNIASIG Asigurari de Viata
Competitive Distribution Strategies For The Insurance Sector ASIBAN


Interview with Mr. Bogdan STAN,

XPRIMM: Following the launching of products from the Romanian market, we have reached to the conclusion that there is a tendency in the market to a customized direction, to build more different insurance products tailormade for different kinds of clients necessities. In this way, can we speak about such a tendency?
Bogdan STAN:
The Romanian market is somehow too conservative. World-wide, there are many insurance articles which can call forth negative reactions to the Romanian insurance market. This was the problem that ASITRANS was confronted two years ago, when we intended to launch a product which covered the exceeding of the legal speed limit. This project has aroused many negative reactions, inclusive many difficulties regarding the framing in a specific insurance class, and I admit that it made us abandon this launching idea. However, this product exists in other countries, members of European Union.
But in the Romanian market, we must also aknowledge that we further, have, a reduced penetration rate of the gross written premiums in GDP, compared to other European countries, and I think that one of the reasons to be considered is the reduced number of products. The client must be stimulated in various methods to try a new product, not only the mandatory ones, like for example the MTPL insurance. Then he can become a constant client.
Regarding the market's tendency relative to the products, my believe is that in the future they will become more diverse and the difference will be made on the quality, not on the price.
This opinion is based on the fact that the companies management has made a full cycle, in the first phase we have hunted only the market share, being targeted only the impressive growths. After that, losses had appeared, followed by a minimal point of activity.
This stage has been surpassed and we begin to reform the activity, by implementing a healthy underwriting policy.
I hope that this cycle will not be repeated, that we will not make the same mistakes... In this way, the companies will be reoriented to high quality products and connective utilities on correct prices.

XPRIMM: However, do you believe that the Romanian people are ready for these kind of special products?
We have started from the premise that the offer must be different, both on the targeted customers and concerning the complexity or the simplicity of the product. There must be very common products, the general insurance type that can be sold instantaneous, answering the necessities of a special customer segment and more complexe products, which to satisfy the need of more sophisticated customers.

XPRIMM: Referring to the Romanian profile industry, which you consider to be the most important issue to affect the insurance market at this moment and how can it be solved?
If we are talking about difficulties, I can say that they are certaintly bounded by the quality of the services provided by the distribution channels. These channels are too long, they have too many elements. In my opinion, the inadequacy regulation by the intermediary can be considered, in 2007, the primary weakness of the national industry. At the moment, the legislation reports a few elements, several players with different business: insurers, customers, mediators - which make the connection between the insurers and customers.
As they are today defined by the legislation, we can imagine a path with two alignments. The connection between insurer and customer is made by the insurance agent, while between the customer and insurer te connection is made by th insurance broker.
So, the agent is the advanced person for the insurer, the broker is the commissioner, he must discover the best offer for the client.
The actual appears when a company has a failure on the distribution chain, when the customer does not receive the best service. In this case, the insurer is the guilty one. There are different situations, from the policies that are unrecorded to unsatisfying written. Every time, the problem must be adjusted by the insurer. So, we expect the implementation of the agents' Book, which will conspicuously, reduce the number of unserious brokers. Also, I consider, that it will be necessary to implement a new standard for the insurance agent profession, which impose necessary prerequisite, more exactingness...
Today there are many agents insufficient trained, on the market, due to the fact that the minimal requests are not properly met, so I consider, as I said, that this is the biggest problem on the insurance market.
The fact that the services to the clients are, frequently, inadequate creates problems because the customers don't make the difference between the agent and the company.

XPRIMM: What do you consider to be the best solution for the insurance market's development?
From the qualitative point of view, I can say that we can feel the absence of insurers common projects. In my opinion, the insurers have reached the maturity and they can notice that many particular interests of the companies are linked to the common market interest.
The common projects list is very easy to compile. We think that is extremely necessary to have a common initiative on fraud attempt, because the individual measures are not as efficient as a correlated action that assumes information exchange.
At the same time, the insurers can take common measures in managing the claims. Also, they can negotiate better conditions with the suppliers and they can use specialized IT programs in order to eliminate the unjustified load.
These things can only be accomplished by working together. I hope and I think that we have surpassed the level from four, five years ago, when the first objection regarding the creation of a common data base of the bad payers of the possibility of "customers' theft".
I am convinced that insurance companies can find a method to make changes of useful information, without affecting the clients' right to protection.
From the quantitative point of view, the best solution can be, maybe, a fiscal one. When some of the costs will be deductible, there will be an increase demand of insurance products.

XPRIMM: Thank you!

by vlad.panciu@mxp.ro

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Bogdan STAN
Mr. Bogdan STAN,


FORD plans to invest in Romania
FORD Motor Company plans to invest EUR 675 million in Romanian car-maker Automobile Craiova if it wins a tender to acquire a majority stake in the company.
Earlier this month, FORD submitted the sole bid in a tendering for a 72.4% stake of the plant in a sale which the Government hopes to wrap up by September 1.
"If the Ford bid is successful, the company would commit to investing EUR 675 million in the site to upgrade and modernize the plant in line with global FORD Motor Company standards", FORD representatives said in a statement.
FORD's strategy for the Craiova-based plant was discussed on Monday at meetings between Romanian Prime Minister Calin POPESCU-TARICEANU and FORD of Europe President and CEO, John FLEMING.
The U.S. carmaker, which also said it plans to raise employment levels to 7,000, and potentially up to 9,000, from 3,900 at present, plans to reach output of 300,000 units a year. The plant produced 24,000 vehicles in 2006.
"By 2012, we would expect to be spending around one billion euros a year in Romania to support the Craiova plant", John FLEMING stated.
The Romanian cabinet bought back the troubled Craiova carmaker from its bankrupt owner, Daewoo Motor, in late 2006 for USD 51 million and paid another USD 10 million for debts stemming from past loans secured by the Korean company.
On Monday, the Romanian Prime-Minister said FORD's technical offer meets the government's expectations. Its financial offer has yet to be opened by Romanian authorities. Many auto-part makers have set up in the new European Union member country recently, attracted by the rising output of Renault's Dacia plant, cheap labor and favorable tax rates.
by REUTERS, 17.07.2007

Romanian car brand Dacia improved exports by 50% in 2007
DACIA, the Romanian car maker taken over by Renault, increased its exports by 50.6% in the first semester of the year as compared with 2006, according to a press release issued on Thursday. 111,834 DACIA cars were sold in the first six months of 2007, out of which 105.566 were produced in Romania and the other 6.268 in a factory in Somaca, Morrocco.
Only in Romania, the company sold more than a half of the total production while the rest were exported to Western Europe. The main Western market was France with 14.915 sold cars since the beginning of the year, followed by Germany with 8.357 cars sold. Algeria, Spain and Ukraine are also leading importers of DACIA cars.
by hotnews.ro, 15.07.2007

PIRELLI RE and UNICREDIT Tiriac Bank, Joint-Venture
Italian real-estate group PIRELLI RE signed a joint-venture deal with UNICREDIT Tiriac Bank in order to penetrate the Romanian market under the PIRELLI RE Romania label, reads a PIRELLI Re press release. PIRELLI RE owns 80% of PIRELLI RE Romania, with the remaining 20 per cent being owned by UNICREDIT Tiriac Bank. The deal follows the strengthening of PIRELLI RE which occurred by developing PIRELLI Pekao Real Estate (75% PIRELLI RE and 25% Bank Pekao) on the Polish market. Also the group's representatives estimated that the real estate investments in Romania would reach EUR 500 million in 2007, twice the level reached in 2005, when EUR 250 million were invested. The residential sector in particular has a huge growth potential, in the context of an extensive urban renewal project being under way and of a population growth of 1.4 per cent per year, the Italian investors believe. They estimate that there will be a deficit of 700,000 to 1 million houses in the following years. PIRELLI RE is the largest player on the real estate market in Italy and one of the most important in Europe, managing assets that surpass EUR 14.5 billion.
by costi.boroda@mxp.ro, 19.07.2007

BRD - Romania's best bank
BRD - Groupe Societe Generale has been extended the Best Romanian Bank Award by the Euromoney magazine in the third consecutive year, for its retail segment development strategy. The award was granted based on the financial results reported in connection with last year, reads a BRD press release. BRD is Romania's second largest bank with assets of over EUR 8.7 billion, more than 2.2 million customers and over 600 units. BRD has issued 2 million debit and credit cards and operates a network of 1,100 ATMs and 10,000 POSs. The Euromoney magazine also awarded RAIFFEISEN Zentralbank and its Central and Eastern European subsidiary RAIFFEISEN International Bank as the Best Bank in Central and Eastern Europe. The RAIFFEISEN Group has been in Romania since 1998. In 2001, RAIFFEISEN acquired Banca AGRICOLA that merged into the local subsidiary of the Austrian group in 2002.
After Q1 RAIFFEISEN Romania was reporting EUR 4.84 billion in assets.
by costi.boroda@mxp.ro, 18.07.2007

The National Bank has not intervened on the currency market
The National Bank of Romania (BNR) has not intervened in the last few days on the foreign currency market to slow down the strong appreciation of the RON, declared the Senior Economist of the institution, Valentin LAZEA, quoted by Mediafax. Asked if the bank has recently intervened to temper the quick growth of the currency, LAZEA denied this. "No, it has not intervened", he said.
The RON rose last week to the highest level in the last five years, the advance being fueled by the strong demand, both from the foreign investors and the local ones, who ignored the warnings of the international observers about the future risks.
In the meantime, the appreciation of the currency calmed down to a certain extent, and several local players declared that BNR had intervened to temper the market.
Valentin LAZEA participated to a meeting of the Romanian exporters, who claimed that the strong RON affects their affairs. He said that BNR has two instruments to temper the appreciation of the currency and could use one of them.
by HotNews.ro, 16.07.2007

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NBM Reinsurance



Click here
for ICAR Forum!
All the details regarding the 2007 Edition of ICAR - The International CAtastrophic Risks Forum have already been posted on the event web-site: www.icarforum.ro.
ICAR 2007 is the main European catastrophic risks event. This edition will take place at the Parliament Palace in Bucharest, Romania, between October 1st - 2nd, 2007.
Whether we are talking about preventing and mitigating flooding risks or other weather-related catastrophes or about the Romanian Catastrophe Insurance Program and how the accumulated pool risks will be placed on the international reinsurance market - ICAR 2007 will provide answers to all these major issues which are currently affecting the market.
Click here for more details!
by mihaela.circu@mxp.ro, 26.06.2007

The insurance market will exceed EUR. 2.4 billion
By the end of 2007, the insurance market will grow to EUR 2.4 billion, according to ISC estimates concerning the evolution of this sector in 2006.
As a result, the general insurance will cross the value of EUR 2 billion (RON 6.7 billion).
ISC forecast anticipates that a major contribution to this value will come from direct insurance, warranty insurance, property insurance, MTLP insurance as well as from travel insurance abroad.
"On the life insurance segment, we expect a total amount of the written premiums of EUR 400 million, an increase by 10% comparing to 2005 results, mainly due to the health insurance segment", ISC reports.
Reporting the estimated volume of the written premiums (general and life insurance) to the GDP expected volume for 2007 (EUR 125 billion according to National Committee for Forecast for 2007-2013) results a penetration rate above 2%.
In 2006, insurance market registered an increase by 23.68% compared to 2005 (17.01%), while gross written premiums from direct insurance and reinsurance rewards accounted EUR 1,69 billion.
by mihaela.circu@mxp.ro, 5.07.2007

BCR Asigurari, 104% growth in the first 5 months
In the first five months of this year, BCR Asigurari has underwritten a total of about RON 309.68 million, with a 104% growth compared to the similar period of 2006.
The lines of business where the most dynamic evolution was recorded are: electronic equipments' insurance and motor insurance.
"The evolution that we have recorded in these 5 months can be explained by a variety of financing methods for electronic equipments and industrial tools. At the same time, another growth impulse of our business was the expansion of the building sector", Mihai TECAU, the President of BCR Asigurari has stated.
"Simultaneously, the voluntary insurance of animals has recorded a dynamic growth, sustained by European financing programs of the agricultural sector", the company's official has added.
A constant growth rate, with 30% in average, has been recorded on the Motor voluntary insurance (CASCO).
According to the Insurance PROFILE Review, at March 31 we found BCR Asigurari in the second place on the national market, by the volume of gross written premiums, with underwritings of RON 220.09 million, with a real growth of 146.75%, as compared to Q1/2006.
by andreea.ionete@mxp.ro, 10.07.2007

A 50% increase for BT Asigurari in the first five months

The volume of gross premiums underwritten by BT Asigurari reached RON 108.16 million in the first five months of 2007, more 50% compared to the results registered in the similar period of 2006.
At the same time, the paid claims were RON 64.95 million in the analyzed period.
As for the products portfolio's structure and dynamics of different insurance classes in the first five months, motor insurances registered the most important increase.
"The gross premiums' enhance on motor insurance segment was due to the important clients with large car fleet that were attracted in its portfolio by BT Asigurari", the representatives of the company declared for XPRIMM Newsletters.
"Motor insurance are closely followed by the property insurance, up with 93%, as compared to the last years' similar period. The expand of the building field and industrial investments from different parts of Romania, which determined drawing important objectives in our portfolio are at the foreground of this evolution", the company's officials stated.
Holding the 10th position on the Romanian market, according to Insurance Profile Review, BT Asigurari underwrote RON 37.06 million in the first trimester of 2007, with a real growth of 56.06% in comparison to the first trimester of 2006.
by andreea.ionete@mxp.ro, 12.07.2007

The first Top of the facultative private pension funds
According to BRD Societe Generale, the depositary bank of the facultative private pension funds, the assets of the four facultative private pension funds active on Pillar III reached EUR 31,500 on the 9th of July 2007. This is the result of the first contributions month from the signing date of the first adhesion contracts to the facultative pension funds. In the BRD Soc-Gen top of the collected contributions the situation is the following: ING Clasic Fund (administrated by ING Asigurari de Viata) with EUR 13,500, followed by AZT Moderato (ALLIANZ TIRIAC Pensii Private), Pensia mea (AVIVA) and BCR Prudent (BCR Asigurari de Viata).
As we have previously announced in XPRIMM Newsletters, another two funds entered the market: AZT Vivace and ING Optim, which will start to sell soon.
by liviu.huluta@mxp.ro 13.07.2007

Capitalization of the insurance market, over RON 1.4 billion in 2006
According to the Annual Report of the Insurance Supervisory Commission, the value of the social capital underwritten by the 41 authorized insurance companies was slightly under RON 1.41 billion (EUR 415.85 million) at the end of 2006, in real growth with 50.94% comparing to 2005.
From the structural point of view, within the underwritten social capital, 89.3% were cash, representing RON 1.26 million (EUR 371.34 million) and natural capital in value of RON 150.51 million (EUR 44.51 million), meaning 10.7% of the total.
The Insurance Supervisory Commission informs over an improvement of the social capital's structure, which increased its cash weight with 6.7%.
Also, the participation weight of the foreign investors grew from RON 435.51 million (EUR 118.44 million), in 2005, to RON 750.1 million (EUR 221.8 million), in 2006, meaning a 64.23% real enhance, being influenced both by the authorization of a new three companies with majority foreign shareholders: KD Life Asigurari (Slovenia), CLAL Romania (The Netherlands) and CARDIF Asigurari (France) and by the change of the shareholders of other four companies through the acquisition of shares.
So, taking into consideration the norms regarding the calculation of the solvency margin, of the liquidity indicators, of the assets which cover the technical reserves and, not at last, the technical reserves, applied from the 1st of January 2007, the Insurance Supervisory Commission estimates that the management of insurers will continue in 2007 to take all the measures needed for the increase of social capital, restructure of the portfolio and mergers or portfolios' transfers.
by andreea.ionete@mxp.ro, 10.07.2007

BCR Asigurari launches claims and development strategies centre
BCR Asigurari is writing the receipe for success for the second half of the year, after it held the second place on the Romanian insurance market in the first quarter of 2007 and grew its volume of gross written premiums with 104% in the first 5 months of this year compared to the similar period of 2006.
Thus, the company intends to straighten its position on the market and to intensify the promotion of the niche products for particular clients.
"Since the beginning of the year, we have intensified and accelerated the development process of new insurance products. Until this moment, BCR Asigurari has launched two new products on the Romanian profile market, Private Health Insurance - VIP, the result of their collaboration with AXA Krankenversicherung AG from Germany, and Commercial Credits Insurance, both being significantly different from the products of the same category, difference that presents a series of benefits for clients", Mihai TECAU, President of BCR Asigurari, stated for XPRIMM Newsletters.
"Also, in order to meet our clients' expectations, we shall inaugurate soon a claim centre to serve for the solving of the damage files in the motor insurances' case", the quoted official stated.
The claims centre of BCR Asigurari will have extra opening hours and within it there will function a police unit specialized on the road accidents' notice.
"The mission of this centre is to accelerate the notice process and to maximize the solving motor damages' efficiency, respectively the appraisal and payment through the prepared personal in the claim files' administration", Mihai TECAU has completed.
So, without any restraint for the covered area to be conditioned by the fact that the notice has to be made in the place where the event happened, all drivers involved in a car accident in Bucharest will be able to address to this centre.
In the first 5 months of this year, BCR Asigurari registered a RON 309.68 million amount of gross written premiums, up 104% compared to the similar period of 2006.
by andreea.ionete@mxp.ro, 16.07.2007

CAPITAL & ALLIANCE - on the right way
Insurance broker CAPITAL & ALLIANCE will have an excellent 2007 year, the estimated volume of mediated premiums exceeding EUR 4 million, Cristian ANGHEL, General Director of CAPITAL&ALLIANCE stated for XPRIMM Newsletters.
"2007 means the activity's straighten for CAPITAL&ALLIANCE. We have started by interrupting the collaboration with two important clients from the mediated premiums point of view with the clear purpose of growing the efficiency of the financial result. And we were right....With an amount of EUR 1.35 million mediated premiums in the first semester of the year (up with 26% in comparison to the first 6 months of the precedent year) and generated commission of EUR 0.22 million (more with 63%), the results can't be considered but excellent", the General Director has explained.
For 2007 the quoted official estimates that the generated commission will reach EUR 650,000. The increase aimed by the company on both client segments is 30% on retail and, respectively, 100% on corporate.
"We believe that during our eight years of activity, we have succeeded in creating a solid business, and financial results aren't everything....After we became member of GLOBEX International four years ago, this year, in June, we got a second international recognition, becoming member of Worldwide Broker Network, the most important international profile organization", Cristian ANGHEL added.
The General Director of CAPITAL & ALLIANCE sees a great potential in the Romanian insurance market. The major problem would be, according to him, the dependence of insurance market to the leasing market. "In 2005, the leasing market had a 45% increase, while insurance market enhanced 27%. In 2006, leasing market grew 63% and insurance market went up with 30%. In conclusion, we can affirm that proportions have maintained.... However, there are more niche market and unused sale models. These must be identified and exploited", the official concluded.
by vlad.panciu@mxp.ro, 13.07.2007

Green light for BT AEGON on pension market
BT AEGON, the new company of the Financial Group Banca TRANSILVANIA, was authorized by the Private Pension Scheme Supervisory Commission to set up a private pension company. This will activate on the compulsory pension field (Pillar II) and has as objective to be among first five players on the market and to have a share market of 15%.
The General Director of the pension company is Silvia SIRB. "We have a clear objective, a definite strategy and we are confident that we can aim this with the clients' and partners' support. We shall use the sale force of Banca TRANSILVANIA, the network of BT Asigurari, but also other sources which ease the consolidation on the market, as brokers authorized and specialized on this field", Silvia SIRB stated.
"BT AEGON enters the market with 2 majors advantages, which are also the partners of this project: Banca TRANSILVANIA, a powerful brand at national level, with a great distribution and sale network, formed of 390 locations, and AEGON, one of the most important life insurance and pensions company, with more than 160 international experience in the field", Robert C. REKKERS, General Director of Banca TRANSILVANIA affirmed.
by liviu.huluta@mxp.ro, 10.07.2007

Almost RON 68 million - Income for brokers in 2006
The net income recorded on the brokerage market in 2006 has exceeded the amount of RON 67.88 million.
75% of this value has been realized by 24 companies according to the financial situation reported by 313 insurance mediators to Insurance Supervisory Commission.
The annual report published by the supervisory authority reveals that 220 insurance brokers have obtained income, while 93 had a negative financial result. The total losses represent RON 3.78 million.
In the same time, the total income generated by the brokerage industry represented RON 239.77 million.
by andreea.ionete@mxp.ro, 11.07.2007

OMNIASIG strengthens its position on the market
Insurance Company OMNIASIG, member of VIENNA Insurance Group announced its intention to consolidate its position on general insurance segment as well as on developing Customer Support services.
In the first five months of the year, the company has increased its business with 60.7% comparatively with the similar period of 2006, by an amount of gross written premiums of RON 308.54 million.
"We plan to concentrate our efforts and to consolidate OMNIASIG's position on general insurance market. In this direction, one of the major targets is represented by the development of the retail segment through an attractive quotation, combined with the development of the territorial network. Also, we intend to involve more agents in the business and to increase the number of our subsidiaries up to 300 units", Costi STRANIC, Sales Director, OMNIASIG has stated for XPRIMM News.
"Financial results in the first parte of 2007 were influenced by an important increase of the gross written premiums comparatively with paid claims dynamics, following to maintain a prudence policy of underwritting major risks, sustained by an efficient reinsurance program", Costi STRATNIC has completed.
The most relevant rates of growth were achieved on the MTPL and CASCO segments, accidents, credit and health insurance.
by andreea.ionete@mxp.ro, 19.07.2007


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Romania, Bulgaria and Croatia - full CEA members

The CEA General Assembly voted in favor of three associate members became full CEA members. Following the accession of Romania and Bulgaria to the EU on 1 January 2007, the National Association of Insurance and Reinsurance Companies from Romania (UNSAR) and the Bulgarian National Association (ABZ) have now become full members of CEA.
Following its request and the approval of the Presidential Council in March, the Croatian Insurance Bureau also became a full member of CEA on 15 June, after 15 years of efforts, and now is the only member of this organization which is not in the European Union.
Speaking after the General Assembly, CEA's General Director, Michaela KOLLER said that she was "delighted that, Romania, Bulgaria and Croatia have joined as full members of the organization. As the representative organization of the European insurance and reinsurance industry, CEA benefits greatly from this decision and we welcome the opportunity for enhanced dialogue with the Romanian, Bulgarian, and Croatian markets.
Clearly the insurance market in each of these countries recognizes the importance of being represented at European level and of being able to contribute fully to key projects of strategic interest to the European insurance industry, such as Solvency II and the European Commission's Green Paper on Retail Financial Services".
Members of the CEA are 33 European national insurance associations and gather 5.000 companies with more than one million employees.
by oleg.doronceanu@mxp.ro, 18.07.2007

ROSGOSSTRAKH pointing Romania
IC ROSGOSSTRAKH (Russia) has recently announced about its intention to extend on the Eastern European and CIS insurance markets, aiming to take the number one position in this region, according to Danil KHACHATUROV, CEO of ROSGOSSTRAKH.
"ROSGOSSTRAKH plans to develop business in the CIS countries, such as Romania, Moldova, Ukraine, Belarus, on Caucasus and Central Asia", noted KHACHATUROV.
At the same time, the appropriate entry of the Russian insurer on the Moldavian market is quite sure, as representatives of the ROSGOSSTRAKH have already visited the larger insurance companies from Moldova, stated INFOTAG. Details of negotiations are not disclosed.
Independent experts consider that arrival on the insurance market of Moldova of the Russian company can essentially affect alignment of forces and competition among the Moldavian insurers.
ROSGOSSTRAKH is one of the largest insurance companies in Russia, on preliminary data, in the first half-year 2007 the volume of the insurance premiums collected by the company amounted USD 1.1 billion and group profit is expected to exceed USD 40 million.
by oleg.doronceanu@mxp.ro, 13.07.2007

TRANSSIB Re renewed its retrocession programmes
TRANSSIB Re, one of the leading Russian reinsurers, renewed its property&technical and also marine&cargo retrocession programmes, according to reinsurer's report.
The new terms have been in effect since July 1, 2007, and were placed by global brokers AON and WILLIS.
Limits under property and technical risks were increased substantially from USD 15 million to USD 25 million. Net retention of TRANSSIB Re remained unchanged at USD 500,000. The programme covers the territory of Russia, other CIS states and Eastern Europe.
The programme leader is MUNICH Re, currently rated AA- by STANDART&POOR's, also, a substantial portion of the capacity is traditionally provided by HANNOVER Re (AA- from S&P). Both MUNICH Re and HANNOVER Re account for 95% of the total capacity.
The marine and cargo cover has been also renewed in effect from July 1, 2007. Total limit amounts USD 6 million, and net retention of TRANSSIB Re makes out USD 500,000.
The cover provided encompasses cargo reinsurance risks, marine risks, including vessels under construction, and P&I. The programme covers risks around the globe and includes military risks protection as well.
Over 51% of the capacities are placed with six LLOYD's syndicates, rated A+ by S&P. The leader of the programme is HOUSTON Casualty (US) with S&P rating AA.
TRANSSIB Re has been cooperating with these reinsurers for over ten years.
The programme's liability is guaranteed by the fact that 90% of the capacities are provided by companies rated with "A" or above by international rating agencies.
by oleg.doronceanu@mxp.ro, 12.07.2007

New expectations on the Russian market concerning the marine insurance
Deputy of the Russian State Duma, Vladislav REZNIK has proposed amendments to the law on insurance that would permit Russian ship owners to conclude insurance contracts with foreign companies for ships registered in the Russian international register, according to RP Newsline.
Presently, the Trade Seafaring Codex provides that Russian ships take coverage both with local and foreign companies. However, the existing law "On the organization of the insurance business" states that only insurers licensed in Russia may provide insurance for legal entities and individuals having resident status in the RF.
Despite the fact that the majority of ship owners now are able to conclude contracts with foreign insurers, those insured had to face higher tariffs than in Russia. Russian insurers have some competitive advantages over their foreign rivals, such as a more flexible client policy and a better understanding of the interests and problems of Russian ship owners. All these factors have a significant influence on the choice of a marine hull insurer.
According to SCANDINAVIA's experts, stated by RP Newsline, ship owners' liability insurance has some peculiarities to be noted. In case of accident and until the guilty party is determined, the authorities may apply preventive arrest or seizure to a ship unless its owner has obtained a guaranty from the legally recognized insurance companies. Foreign authorities, as a rule, do not recognize Russian companies. That is why, in spite of higher value of insurance coverage, the majority of ship owners, whose boats are active in international shipping, prefer to take insurance protection with foreign companies or P&I clubs. As a result, the proposed amendments will make the process less complicated. Ship owners will be able to conclude contracts with foreigners in Russia and (if a liability insurance policy is a necessary condition for writing business) attribute expenses to the taxable base.
At the same time, analysts have pointed out that the amendments will simplify relations between the insured and foreign insurance companies that have been successfully cooperating through ship owners' offshore subsidiaries for a long time. The changes should not influence the alignment of forces in the market and give any additional advantages to Russian or foreign insurers.
by irina.galasanu@mxp.ro, 17.07.2007

Bulgarian insurance code, modified
Council of Ministers from Bulgaria approved amendments to the Insurance Code aiming to unify its legislation according to EU directives, according to insurance.bg.
The most significant amendment was to establish a Security Fund that will made compensation payments on the obligatory MTPL, accident insurance, disease and all life insurance products in the cases when the insurer goes bankrupt. Similar security schemes protect the clients of the banks and the investment mediators.
Also, the amendments to the Insurance Code regulate a scheme protecting loan debtors who have brought certain insurance in regard to the credit. The objective of the act is to avert the bank or the insurer simply suspending the insurance without the client's being aware of the fact. The crediting institution which sold insurance is obliged to inform the clients of any changes in the insurance status.
The regression risk will be disregarded, i.e. average claims put in by drivers of MTPL insured motors who caused car accidents will not be taken into consideration, so the suggestion is that regression risks be present among the insurance companies, not the insured.
Another proposal regarding MTPL insurance suggests amendments to the Penal Code and the Civil Code. The objective is that no civil claims will be brought against the driver who caused the road accident and who has bought the obligatory insurance product when the legal proceedings have already begun. Thus the driver in question will not have to pay anything, he will be just pronounced guilty or not guilty of causing a road accident. The amount of the compensation payment will be determined in accordance with the Civil Code and the injured party will protect their interests for free. Thus the insurer will be actually involved in the lawsuit (he cannot take part in proceedings under the Penal Code) and be bound to the compensation payment amount.
The amendments to the Insurance code do as well precisely define the range of the confidential information. Presently the insurers' business, important information about the clients is considered confidential while it has to be made known to the customers.
FSC introduced its suggestions a month ago but the insurers remonstrated against their not being involved in the preparation of the motion. Despite their expectation that the deputies will listen to their arguments against, Council of Ministers carried the amendments as proposed.
by insurance.bg, 13.07.2007

Ukrainian Government to sell its stake in ORANTA
The Ukrainian government announced recently about its decision to sell 25% shares of the national-stock insurance company ORANTA.
The package consists from 1,908 million shares that makes 25 % + 1 shares in the authorized capital of the company, at a general face-value EUR 1.6 million (EUR 0.08 per action).
"The selling procedure of the Government shares in ORANTA will follow the principles of an public auction, and the potential buyer must have international experience in the field", considers Valentina SEMENJUK, Chairman of Fund of State Property of Ukraine.
Initial cost of the Government stake is EUR 11,5 million, but independent experts appreciate that the price is underestimated at least 3-4 times.
"Total value of the 25% shares held by the Government in ORANTA is approximately EUR 14.4 million", estimates CEO of ORANTA, Oleg SPILKA.
Also, "ORANTA is estimated at a total cost of EUR 181 million. Basically, if the company is good for sale, it can be sold for EUR 290-360 million if the interesting buyer is found. Therefore, cost of the blocking package (25 %+1 action) cannot make less EUR 36-40 million, and it is the most modest calculation ", noted Pavel NELGA, CEO, Ukrainian Insurance Group.
ORANTA was established in 1993 on the basis of UKRGOSSTRAKH, set up in 1921.
In Q1/2007 insurer wrote EUR 15.6 million in premiums and paid out EUR 598 thousands in claims, with assets that amounted EUR 5.3 million, as of April 1, 2007.
According to the company report, its shareholders are: COLORINO Trading Limited - 24,98 %, SALETA Limited - 20,22 %, (Cyprus-based companies, affiliated with Kazakhstan-based financial group BANK TURAN Alem, BTA Group), TURAN Alem Securities (a part of BTA) - 14,4 %, other shareholders -15,5 %. The Fund of State Property of Ukraine owns a blocking package of 25+1 % of shares.
by irina.galasanu, 13.07.2007

National Council of Slovenia to debate veto on insurance legislation
The National Council of Slovenia, the upper chamber of Parliament, is going to debate a veto on the recently passed amendments to the act on ownership transformation of insurance companies, Slovene Press Agency reports.
The amendments cross out provisions which determined the transfer of 35.25% of Zavarovalnica TRIGLAV, Slovenia's largest insurer, to persons who held TRIGLAV policies in 1990. Instead, the share would remain in state ownership.
The initiative, filed up by 26 members of the 40-strong upper chamber, states that by excluding TRIGLAV's former customers, the amendments violate the right to equal treatment.
If the veto is successful, the lower chamber will have to take a re-vote on the legislation.
by oleg.doronceanu@mxp.ro, 18.07.2007

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