No. 91, August 30th, 2007

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ICAR Forum

Too small to do something?

This summer the ecology was really trendy... In a country and especially a capital city that have literally "boiled" for weeks, all of us were thinking what to do in order to reduce the effects of the global warming...
Maybe if we recycle the paper, not print the e-mails, not use so many plastic bags, reduce the fuel consumption and protect the water reserves...

But, while the summer passes, our enthusiasm is decreasing...
Actually, according to a study made by a well-known British institute, millions of people from the entire world consider that their way of living and their behavior does not contribute in any case to the climate changes and in their opinion it will be too much of an effort to adopt a "green" life style.
But the nature does not forgive us...

The climate warming, whom effects have been compensated over the last two years by some natural phenomena, will be felt with a serious impact starting with 2009, when record temperatures will be registered. These are the results of a computer simulation made by a team of British researchers.
This is why the meteorologists forecast that, during 2009-2014, the climate values will surpass the record from 1998, considered to be the hottest year.

In terms of costs, the total pay bill for the global warming might reach EUR 5,500 billion, it shows a World Bank study, and in the worst scenario that signify over 20% from the GDP.

A significant part of the losses are covered by the insurance and reinsurance industry. Thus, the number of natural catastrophes has doubled during 1960-1999, while the insured losses, most of them produced by meteorological phenomena, have grown by seven times. Only in 2006, the claims paid by the global insurance industry have reached USD 43 billion, according to SIGMA report of SWISS Re.

Taking into consideration this fact, the insurance industry must be involved for limiting the impact that the climate change has at economic and social level.
But until then, let's wait for the next heat wave that might make us consider respecting the environment...

by mihaela.circu@mxp.ro

sus up


BCR Asigurari de Viata


OMNIASIG Asigurari de Viata
Competitive Distribution Strategies For The Insurance Sector


Interview with Mr. Shah ROUF,
AVIVA Group Romania

XPRIMM: How do you consider the evolution of the life insurance market in Romania, especially in this year?
Shah ROUF:
I think there is no doubt that at the moment Romania is primarily a general insurance market, in terms of GWP, in terms of income, employees, share of activity. I don't see any change in the next years, but the life insurance business has a large potential, because we have started from a lower base. The main reason is going to happen is that, as the economy matures and by that I don't mean just growth and GDP, we have seen people opening deposits accounts and actually starting to make savings and for us is the first crucial indicator of what we hope to be a long term our business. That is mainly because we are an integral part of saving mechanism of economy, of the country, of people protecting their life. We, AVIVA, don't call us a life insurance company; we consider being in a long term savings business and part of that is protecting peoples' assets, life insurance being a part of it.
As the company or the market matures, we tend to write more protection business and, at some point, protection becomes a subelement of long term saving products.
That is the trend we are hoping to see starting in Romania. Probably Bucharest is the leading hedge of the country as you have expected. A lot of our business includes life protection I would like to see that mixed increased pure protection because you understand your financial situation, what your family's needs are, what the consequence are, and not only because otherwise you don't get a loan.
On the other side, the biggest hope or aspirations from the pension reform is to make a lot of people aware that it is a long term saving for retirement or something else, that they understand as life insurance company, as a industry is a long term need and they start investing with us for future and also for their aspirations.

XPRIMM: Can you make an estimation of the growth written premiums of the life insurance market for 2010?
S. R.:
The life insurance industry is situated, in this moment, around EUR 350 million and the growth rate is around 40%. We expect both indicators to pick up because of the pensions, because of people general wealth, by 10% on average. If that is the case, by 2010, this line of business will be close to EUR 1 billion market and I don't count here the assets from the pensions.

XPRIMM: In your opinion, who is going to be the strongest competitor on the private pension market?
S. R.:
Of course, we expect the life insurance companies: ING, ALLIANZ-TIRIAC, AIG, who are the main competitors in other countries, too. The reason we have done so well is because we understand the product, we understand the distribution. A surprising fact for Romania is the implication of the banks, which are not so important players in other parts of the world.
For Romania, Poland is the best example. It had to do it from a different point of view, had to do it from continuing education point of view and it had a great success.
In terms of monthly contributions, in Poland, AVIVA gets EUR 19 million. That's big money. Nine years ago, in Poland, there was people's apathy, some were interested, others were less, what happens, happens, but now, in Poland, people have got a fund. Now if anybody is talking about a pension reform or mention anything about pensions, people will read the papers, they will complain about their politicians, they will go on TV. Ten years ago, they didn't do that because there wasn't any personal connection. Now its their money and if one says about pensions' regulation they see the direct impact. The first year, second year, the funds were built up, in five - six year, beyond, this will be tangible assets. That's happens in Poland and I hope the same thing will happen in Romania too.

XPRIMM: You have started working in Romania with BRD. How come you don't work together on the private pension market? Basically you are competitors and partners in the same time.
S. R.:
We would have been interested to work with BRD, but for this line of business, at the moment, they have different interests.
We are the global leading in bancassurance. When I say bancassurance I refer to multipartners, and not to financial groups like ING and FORTIS. We have multiple partners and they vary from market to market, so sometimes you work with the bank, sometimes you compete with them.

XPRIMM: Do you think pension market can have an influence over life insurance market?
S. R.:
Very much, sure. In some markets, like in Turkey, life insurance market has shrunk considerably. It has become a pension market. People are buying pensions. That is happening for number of years. I guess in Romania people are interested in buying long term savings, life insurance products, because they have much money, they have to make a product choice, so they chose pensions. So if they need to buy one product they buy pensions and life insurance market shrinks or they buy both if they have enough money, enough savings, enough understandings.

XPRIMM: Do you intend to use recruited agents to sell both pension and life insurances?
S. R.:
It's easy to say yes, the reality is different. Market decides. It's impossible to have permanent sale force of that magnitude and have them trained with product ranges and have them full life insurance financial experts. Even if you could do it, it's difficult. In India we have 35,000 full time agents, so I know how difficult it is. That is from the practical point of view. The second point is that whatever is the interest we recruit a lot of people who are good, who have other jobs. Beyond commission you have to tell them why is worth for them to spend time doing it.

XPRIMM: Why has not enter AVIVA on the general insurance market in Romania?
S. R.:
Globally speaking, we are a composite player: 70% is long term savings, 30% is general insurances. As a group, when it comes of general insurance, we have a philosophy: because general insurances goes up and down, unless we have a significant market share in a very large market, we will not enter on that line of business.
In UK we are number one, in Canada number two. On most general insurance market we operate, we tend to dominate, to be on top.

XPRIMM: How do you consider your position on the Romanian market considering what you have said before?
S. R.:
For AVIVA to be anything less then Top 3 is not good enough as a business. If this was a mature market and we are outside Top 5, there is no way that we are going to accept it. In that context, you have to look at Romanian market and say that entire market is EUR 350 million AVIVA's income is EUR 60 billion. The reason I say this is to highlight the potential of Romania and we are going to make sure we explore the potential.

XPRIMM: What can you say about Bucharest compare to the other parts of the country?
S. R.:
It is completely different. What I have noticed about Romania, is that it's very much dispersed. Typically in most countries there is a very crowded economic area, but in Romania there are several cities that are close in terms of economic development to Bucharest. Timisoara and Iasi are a good examples in this case. They are not going to fade away and let Bucharest to dominate. Still, in Bucharest, the general income is higher. But we can not ignore the rest of the country and look only at Bucharest. The potential of Bucharest is great. A good thing of having any geographic concentration is that all customers are closed to you, which allows you to do things, communicate things. You can cross messages better.

XPRIMM: Can you make an estimation of the company's growth ratio from the gross written premiums point of view in 2007?
S. R.:
We consider that this rate will be about 25%. In the first six months of 2007, we have underwritten RON 38.45 million, which is 29% higher compared with H1/2007.

XPRIMM: Thank you!

by mihaela.circu@mxp.ro

sus up

Mr. Shah ROUF,
AVIVA Group Romania


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by mihaela.circu@mxp.ro, 16.08.2007

There are still aspects to solve out...
The implementation of the Romanian Insurance Program against Catastrophic Risks will start next year.
The first step in this direction represents the approval of the law project by the Executive regarding the mandatory insurance of properties against the natural disasters (earthquakes, earth flows and inundations).
"The normative act will be remitted to the Parliament in order to be debated in the emergency procedure", stated Victor Paul DOBRE, State Secretary through Ministry of Interior and Administrative Reforms.
The insurers are reserved regarding this normative act.
"I can not express our point of view until this act will be signed. All we can say is that last variant of the text, that we had access to, contains a series of new technical elements, which we, insurers, do not agree with and which up to us will generate important difficulties in its application", stated Cristian CONSTANTINESCU, President of UNSAR (National Union of Insurance and Reinsurance Societies).
"In addition, even we perfectly understand the social necessity which generates the law adopting, as business men we are forced to judge only having in front a clear business plan.
Do not forget that in order to constitute the pool, the insurance societies have to make a substantial financial effort and we are not talking only about capital participation. Further on, for the law application, beyond the definition of various technical aspects regarding its implementation, the first and the most important step which has to be made, and which we required many times, is to set up this business plan, in absence of which we can not presents ourselves to shareholders", explains the President of UNSAR.
"Taking in consideration the severity of the meteorological phenomenon that affected Romania in the last period and the high costs of the damaged goods reconstruction, the Romanian Government considered necessary the approval in a very short term of this normative act which is supposed to settle the conditions of mandatory property insurance against the natural disasters", is shown in a statement of the executive.
At the same time, the implementation phase of this normative act is one of the essential subjects of the IVth Edition of ICAR - The International CAtastrophic Risks Forum.
ICAR 2007 is the most popular European event dedicated to the catastrophic risks. This year, the Forum will take place in Bucharest, at Parliament Palace, Nicolae IORGA Hall, during 1-2 October period.
The event is organized in partnership by Ministry of Interns and Administrative Reforms, World Bank and Media XPRIMM.
We remind you that you still have two days more to beneficiate of participation tax discount at ICAR 2007 - The International CAtastrophic Risks Forum.
This way, everyone who wants to take part at the IVth Edition of ICAR will save 50 EUR, in case they subscribe and pay until September 1, 2007.
by mihaela.circu@mxp.ro, 29.08.2007

Pillar III grows 50% in a week
The volume of assets administrated by the companies operating on Pillar III (facultative private pensions) rose 50.83% between 10th and 17th of August, according to data published by the Private Pension System Supervision Commission (CSSPP).
Thus, the five facultative private pension funds on Pillar III so far have assets of RON 610 thousands. The most spectacular growth is attributed to AZT Vivace fund, whose net assets rose 1207%, reaching 156 participants.
The total number of participants on Pillar III is now 5,670 most of which (3,470) have opted for AZT Moderato, administrated by ALLIANZ-TIRIAC Pensii. A number of 1,040 participants have chosen ING Clasic, while PENSIA Mea, administrated by AVIVA was preferred by 813 persons.
At the same time, BCR Prudent, administrated by BCR Asigurari de Viata, has 191 participants.
The Private Pension System Supervision Commission will weekly publish the centralized situation of the facultative private pension funds' assets.
by mihaela.circu@mxp.ro, 24.08.2007

The Romanian Savings Bank is selling too...
Romanian Savings Bank's (RSB) Board of Directors has recently analysed the possible solutions regarding the 25% interest it holds at insurance company ASIBAN.
The financial institution decided to join the other shareholders who have already announced their intention to sell the stakes at ASIBAN.
"We must direct all our efforts towards meeting our already announced strategic objectives which for the first stage, until 2009, refer to modernizing and efficiency growth solutions and consists also in reaching and even exceeding, in some cases, the medium performance levels obtained by the national banking system", Radu Gratian GHETEA, President of RSB mentioned.
On the other side, it is well-known that banking institutions can not invest more than 20% of its own funds in the group's companies, fact which restricts for the moment the possibility for RSB to integrally buy ASIBAN.
"As the bank will develop, it will be possible for us to create the banking-financial group RSB, Radu Gratian GHETEA added.
At the end of 2006, ASIBAN held the fourth place in the insurance companies chart drew up by Insurance PROFILE Magazine.
The insurer posted a nominal growth in euro of almost 30.47% for the previous year, reaching EUR 123.94 million (RON 436.81 million), while the real growth in national currency outran 21%.
by irina.galasanu@mxp.ro, 28.08.2007

BT Asigurari rises by 44%
The first semester of this year brought to BT Asigurari underwritings valuing RON 132.3 million, representing an increase of 44% as compared to the same period of the previous year. The sales in the first six months of this year rose up to RON 113.4 million, 21% more compared to the same period of 2006.
The amount of paid claims in the first six months of 2007 registers RON 76.6 million, overcoming by 105% the value of claims paid in the same period of the last year when its total quantum was about RON 37.4 million.
"The results obtained by BT Asigurari in the first semester of 2007 are based on the strategy adopted by the company's management having as priority the development of balanced portfolio, paying much attention to the human resources problem and orienting its activity to the multiple necessities of our clients", stated Constantin JEICAN, President-General Manager of BT Asigurari.
At the end of June, the total number of agencies and work-points was 303, rising by 68,3% comparing to the same period of the last year, when the society operated through 180 agencies and work-points at the national level. In the same time, the total number of employers reached 1,408, compared to 1,137 in the first semester of 2006, rising by 24%. BT Asigurari activates at national level through an affiliated sales network formed of 11,648 agents.
"We intend to build a culture of performance through the responsibility, demand and integrity of our stuff. Our purpose is to maintain our actual position, in the competition accelerated growth context on the Romanian insurance market, starting with the first months of this year,"stated Constantin JEICAN.
by mihaela.circu@mxp.ro, 23.08.2007

BCR Life underwritings rise by 112.5%
BCR Life registered, in the first semester of the year, a total gross written premiums value of RON 36.5 million, rising up by 112.5% comparing to the same period of the last year. The quantum of company assets has increased by over 244.2%, reaching RON 128.5 million, in only two years of activity.
"This significant growth represents a part of the ascending trend which the company's purpose for this year and it's due to the development of the territorial network sustained by a marketing strategy and well based sales", stated Florina VIZINTEANU, President-General Manager, BCR Life.
BCR Life Insurance is a company member of BCR Group, set up in October 2005, which remarked on the life insurance market due to a very dynamic evolution and high quality services, owing a diversified portfolio of products and extended territorial network.
BCR Life was authorized this year to act as facultative pension funds administrator, and the first launched fund BCR PRUDENT, represents an efficient alternative to make savings for old people. The fund has a low risk degree and aims the persons that prefer a prudential placement, putting on first place the safety of the capital and beneficiating of an investment stable growth. The minimum value of the monthly contribution represents 35 lei, and the maximum can not overcome 15% of the participant income. A very important advantage in opting for a facultative pension is based on the fiscal deductibility: the fund contributions are fiscally deductible in the limit of 200EUR/year.
by mihaela.circu@mxp.ro, 28.08.2007

71 million EUR for ING Life
ING Life Insurance Company has written, in the first six months of this year, premiums up to EUR 71 million, in nominal growth, in European currency, by 11% comparing to the same period of the last year, according to the report published by the Dutch group. In the second quarter of this year, ING Life subscribed EUR 37 million. Also, the insurer reached, in the first six months of 2007, a gross profit of EUR 4 million. In the first quarter of 2006, ING Life obtained a profit of EUR 7 million.
Recently, the insurer celebrated 10 years of activity on the Romanian market. The society is proud of its market share which represents 41.2% at the end of 2006, result that sustain the leading position of ING Life Insurance.
by mihaela.circu@mxp.ro, 16.08.2007

ASIROM - RON 2.81 million profit in 6 months
The insurance company ASIROM reported in the first six months of the current year a net income of RON 2.81 million.
In the mention period, the insurer underwrote gross premiums in amount of RON 337.12 million, compared to RON 334.33 million in the similar period of 2006.
VIENNA Insurance Group recently bought 30% from ASIROM's shares from INTERAGRO, company controlled by businessman Ioan NICULAE, for EUR 46.8 million.
According to specialists' estimations, the company's market value, placed second in the insurers top at the end of 2006, is around EUR 160-170 million.
by mihaela.circu@mxp.ro, 17.08.2007

BCR Fond de Pensii, licensed for Pillar II pension system
BCR Fond de Pensii was licensed by the Private Pension System Supervision Commission (CSSPP) to activate on the Pillar II private pension market as an administrator.
CSSPP also authorized the company's pension plan.
"We expect by the official start for the adhesions' collecting period - September 17th, 2007 - to obtain from CSSPP the license for our private pension fund - BCR Fond de Pensii Administrat Privat. Our goal is to become the leader on the private pension business (Pillar II pensions) with a market share of 30%. BCR Fond de Pensii's clients will benefit from all advantages offered through our partnership with BCR Group - professionalism, experience, solidarity, earnestness and respect", Simona DITESCU, President of BCR Fond de Pensii stated.
BCR Fond de Pensii Administrat Privat is a pension fund with a medium risk; the investments will be made 65% in low risk financial instruments (government bonds, supranational bonds), 25% in the Romanian stock markets, 5% in monetary instruments and 5% in mutual funds.
BCR Fond de Pensii has an initial share capital of RON 50 million, BCR Group holding 99.99% of the company's shares.
by mihaela.circu@mxp.ro, 23.08.2007

BT AEGON, authorized for Second Pillar pensions
BT AEGON, company created by Banca TRANSILVANIA and AEGON, obtained the authorization for launching its new privately administrated pension fund - VITAL.
BT AEGON is one of the first companies of this type in Romania that received the required license from the Private Pension System Supervision Commission (CSSPP).
The company will offer private pensions starting with September 17th, 2007. AEGON and Banca TRANSILVANIA officially announced their partnership and the intention to create BT AEGON at the beginning of this year.
Headquartered in Cluj-Napoca, BT AEGON has a share capital of EUR 7 million and was officially registered as a pension fund in June. The pension plan - VITAL - that contains the structure of fund's investments, was authorized by CSSPP at the beginning of August.
"The finalization of the authorization process represents for us a first step, essential for participating to the development of the Romanian private pension system. We are now in the center of the events and we concentrate our efforts towards increasing our sales force through Banca TRANSILVANIA, BT Asigurari and pension mediation companies", Silvia SIRB, General Manager of BT AEGON stated.
"We also focus out attention towards building our IT and back-office systems, that have a major importance for our project success and we are confident that all our objectives will be met on time", Silvia SIRB added.
BT AEGON uses experience and the financial strength of AEGON and also Banca TRANSILVANIA's brand and distribution network.
by mihaela.circu@mxp.ro, 27.08.2007

121% increase in GRAWE's net income
The insurance company GRAWE Romania Asigurari underwrote premiums totaling over RON 35.4 million in the first half of 2007, registering an increase of 56.7% in comparison to the similar period of the previous year.
The insurer also reported a net income of RON 3.77 million, which represents a 121% growth from the first semester of 2006.
"This substantial improvement of the financial results was generated by the growth of sales volume, assets and investments return and also by an efficient cost management. This strategy was implemented in the entire GRAWE Group", Peter KASYK, General Manager of the Romanian insurer stated.
"We are very pleased with the company's results in this semester, at the subscribed premiums level and also at the income level which reflects an unprecedented growth", the cited official explained.
GRAWE Group has recently announced its intention to enter into private pension business. The Private Pension System Supervision Commission (CSSPP) thus authorized GRAWE Pension Services Broker de Pensii Private as private pension broker for the Second Pillar.
by mihaela.circu@mxp.ro, 16.08.2007

EFG, officially on the insurance market
Two companies received on August 20, 2007 authorization to operate in the domestic insurance market from the Insurance Supervisory Commission, according to the authority's official website www.csa-isc.ro.
Thus, Greek financial group EFG Eurobank entered the Romania insurance market with two companies, of which one is specialized in life and the other in non-life segment.
The two new entities, EFG Eurolife Asigurari Generale and EFG Eurolife Asigurari de Viata have been registered at the Trade Register Office in February, representing a RON 24.12 million investment.
EFG Eurolife Asigurari Generale has a RON 11.23 million share capital, EFG Eurolife AEGA (Greece) being its majority owner with a 85% stake, alongside with EFG Eurobank Egasias, with 9.9% and EFG Eurolife AEAZ (Greece) with 5%.
EFG Eurobank Egasias will as well hold 9.9% of EFG Eurolofe Asigurari de Viata, whose share capital is RON 12.88 million. The majority owner to control 85% of the company is EFG Eurolife AEAZ, while EFG Eurolife AEGA holds a 5% stake.
So far, important financial groups from Greece have shown their interest in our countries' financial services market.
For example, ALPHA Bank, ATE, EFG Eurobank, EGNATIA Bank, EMPORIKI Bank, NBG and PIRAEUS Bank hold together a 11% market share in Romania.
At the same time, NBG was one of the two finalists for the National Savings Bank privatization.
Greek companies are also present among the shareholders of some Romanian insurance companies like GARANTA and ATE Insurance.
by mihaela.circu@mxp.ro, 21.08.2007

KD enters into Pillar II private pension system
The Slovene Group KD filed on August 15 2007 the documentation needed for obtaining the authorization for creating a company that will operate on the Pillar II private pension system.
"We are confident that the Private Pension System Supervision Commission (CSSPP) will give us this authorization by September 17th 2007 (n. red.: the official starting date for the adhesion period to Pillar II pensions)", Ian HARROCKS, CEO, KD Life exclusively stated for the XPRIMM Newsletters.
The new company, that will be lead by Carmen RADU - presently, Deputy General Manager of KD Life - plans to attract over 100,000 contributions from the Pillar II pension market.
For the pension distributions, KD intends to use own selling force, mediating companies but also through partnerships with the patronages.
In the first six months of this year, KD Life underwrote gross premiums in amount of EUR 350,000, 93% of this value being generated by unit-linked insurance. This result represents a 20% increase compared to the July-December 2006 period.
by mihaela.circu@mxp.ro, 17.08.2007

sus up


The Bulgarian insurance market, EUR 360 million in H1/2007
The Bulgarian Commission for Financial Supervision announced the financial results of Bulgarian insurers for the first six months of 2007. Life insurers from Bulgaria wrote EUR 53.75 million in premiums, up by 27.8% compared to the equivalent period a year ago. Claims paid posted a 20.5% rise and amounted to EUR 13.65 million. During the reporting period, life and annuity business accounted for 73.6% of the companies' total premium income, and losses - for 67% of total claims paid.
The Bulgarian non-life insurance sector, with EUR 304.54 million gross written premiums, has reported in this period a 17% growth in comparison with the first half of 2006.
Motor hull and compulsory MTPL, including green card, accounted for as much as 64.4% of total premiums. The highest improvement in premiums was reported in motor hull, by 38.8%. The second best result was in civil liability insurance, by 34.9%, and fire risks, 8%.
Motor insurance lines likewise accounted for over 88% of claims paid in the area.
In the reporting period, the top-5 leaders of the Bulgarian life insurance market were ALLIANZ Life Bulgaria, DZI, UNIQA Life, ING Life Bulgaria and GENERALI Life. Their premium income accounted for 79.8% of the market's total premium income, while in January-June 2006, the five major companies held 70.8% of the local life insurance market.
Out of five non-life leaders, including BULSTRAD, DZI, ALLIANZ Bulgaria, BUL Ins and LEV Ins., three are affiliated with global financial giants. Specifically, BULSTRAD is controlled by VIENNA Insurance Group; ALLIANZ Bulgaria by ALLIANZ SE and KBC has an 80% interest in DZI. The leaders accounted for about 63% of gross premiums written, a drop compared to the 68% in the same period a year ago.
by insurance.bg, 28.08.2007

55.6% growth for Czech private pensions market
In the first half of 2007 pension funds in the Czech Republic delivered a total profit of EUR 94.1 million, 55.6% up on the same period a year before.
Number of the funds' clients grew by 193,000 compared with year-end 2006 and reached 3.8 million, or 60% of the country's working population. In the first half of 2007, total contributions to the pension funds reached EUR 5.43 billion, which is EUR 318.6 million more than a year earlier.
Pension funds continue to pursue a conservative strategy, investing 77% of contributions into bonds and just 7% into shares.
Out of 44 funds established in 1994, when the private pension system was launched in the Czech Republic, only 10 continued to operate by June 30, 2007.
by galasanu.irina@mxp.ro, 21.08.2007

Moldavian Insurance Market is still an emergent one
In the period from January to June 2007, insurance companies operating in the Republic of Moldova generated premiums of USD 26.2 million, 24% up compared with the same period of the current year. Claims settled amounted to almost USD 8 million, increasing 17.8% on January-June 2006, the State Inspectorate for Insurance and Non-State Pension Funds Supervision of the Republic of Moldova reported in August.
As of July 1, 2007, the register of Moldavian insurers included 33 companies compared with 32 in H1/2006. The first six months of 2007 marked mergers of some small insurers into several major groups (ACORD Grup and ASTERRA Grup) as well as set up of a number of insurers.
Life insurance is still undeveloped in Moldavia. In fact, life and non-life business are not separated. The companies writing non-life insurance are permitted to carry out life insurance operations as well if they have a license. Although, there is only one specialized life insurer in Moldova - GRAWE Asigurare De Viata that accounts for the main part of written life insurance premiums.
In January-June 2007, five leaders of the local market (MOLDASIG, QBE ASITO, DONARIS-Group, CARAT and MOLDCARGO) accounted for 66.4% of gross premiums written, or USD 17.72 million. In H1/2006, the market concentration rate was practically the same five top companies with different positions, accounted 62.4% in premiums, or USD 13.44 million.
As of July 1, 2007, aggregate authorized capital of Moldavian insurers totaled about USD 16.8 million, assets, about USD 77.6 million, insurance provisions, about USD 31.3 million. Total net income came to nearly USD 3.8 million.
by irina.galasanu@mxp.ro, 23.08.2007

Nearly 46% growth for non-life insurance market in Latvia
In the first half of 2007, Latvian insurance companies generated non-life insurance premiums of EUR 183.27 million, 45.8% up compared with the same period of the previous year. Non-life claims settled came to EUR 78.75 million, increasing 27.5% on H1/2006, the Latvian Insurers Association (LAA) announced in early August.
Non-life insurance business accounted for 83.1% of gross premiums written in Latvia in January-June 2007, down from 87.3% in the same period last year. In the reporting period, Latvian insurers wrote EUR 220.5 million in premiums, 53.4% up compared with the same period of the previous year, and paid out EUR 85.7 million, a 27.6% increase.
In H1/2007, the number of companies writing non-life business in Latvia decreased to 11 from 12.
Three market leaders did not change in comparison with the first half of 2006. BTA ranked first, accounting for 24.1% of total non-life premiums. In H1/2006, BTA was only second with 22.3%.
The 2006 leader BALTA went a step down as it decreased its market share from 24.6% to 21.5%. PAREKSS Apdrosinasanas Kompanija occupied the third place. The company's market share rose from 9.6% to 12.2%.
In January-June 2007, Top-3 companies accounted for 56.6% of total premiums, or EUR 103.75 million. In H1/2006, they generated premiums of EUR 71.76 million, accounting for 57.15% of the non-life insurance market.
by vlad.boldijar@mxp.ro, 30.08 2007

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NBM Reinsurance

ROMPETROL, sold for EUR 1.6 billion
The Romanian Businessman Dinu PATRICIU, owner of the ROMPETROL oil company, sold a 75% equity interest of the Netherlands-based The ROMPETROL Group NV - TRG (the second-largest player on the Romanian oil market) assessed at an enterprise value of USD 3.61 billion (some EUR 2.66 billion) to Kazakh state-owned oil and gas company KazMunayGas (KMG). Dinu PATRICIU will receive about EUR 1.6 billion, thus becoming the richest businessman in Romania, with the highest liquidity.
The sale is the culmination of a seven-month private auction process conducted by Morgan Stanley's London-based Energy Group and has to be approved by the European Commission and other competition authorities.
KMG and ROMPETROL Holding anticipate that their agreement will be approved with enthusiasm. They are confident that it meets all the regulatory requirements and that the company will significantly contribute to the security of European energy supplies.
KMG will appoint a majority of the Board, which will reflect the new ownership structure. Dinu PATRICIU will maintain his position as Chairman and CEO of the company to secure continuity of vision and strategy in the management.
This acquisition, one of KMG's largest, will bring significant advantages to both shareholders and their clients. KMG will double its refining capacity by gaining access to two ROMPETROL refineries in Romania and increase its retail infrastructure in European markets. TRG's refining capacity exceeds four million tons and the company can distribute more than seven million tons of oil products annually through its own wholesale and retail networks.
"KMG's investment provides TRG with access to raw materials and finance that the company needs to continue its expansion plans, both through investments in refinery improvement, logistics and sensible well-priced acquisitions. The vision we have for TRG's growth is understood, shared and encouraged by our new partners", Dinu PATRICIU said.
By Business Standard, 28.08.2007

5.2% more credits in July
The credits offered to natural and legal persons in July increased 5.2%, compared to June, up to RON 114.66 billion, according to the National Bank of Romania data.
The credits in national currency grew 2.9%, while the ones in EUR expressed in RON increased by 7.7%. The credits employing EUR as currency grew 6.9%.
Compared to the first seven months in 2006, the non-governmental credit increased 46%. The credits in convertible currencies for natural persons increased 12% in July, while financing for companies increased 3.6%.
by costi.boroda@mxp.ro, 24.08.2007

A new investment fund launched by RAIFFEISEN
RAIFFEISEN Asset Management (RAM) will launch the first mutual fund in September, administered in a way to ensure buy-back of at least 90% of the invested amount (if the market's evolution is unfavorable). The launches of the CONFORT Fund and of the Romania Actiuni share Fund are the result of RAM's expansion strategy, whose target was to increase the risk level of the two funds the company already administers, RAIFFEISEN Benefit and RAIFFEISEN Prosper. Romania Actiuni can place 100% of resources into shares. RAIFFEISEN Confort will be the first fund in Romania to use the Constant Proportion Portfolio Insurance (CPPI) administration system, which capitalizes earnings on the equity market when the latter increasing and limits the effect of a drop in share price, by transferring investments to bonds and other fixed-income instruments. RAIFFEISEN Bank has already invested EUR 1 million in the initial capital of each of the Confort and Romania Actiuni funds. RAM officials believe that CPPI ensures a title buyback of 90% of the initial investment, if the buyback takes place two years before and of 100 % at the end of this period. However, if the market offers a favorable trend, buybacks are made at the current value of the investment unit.
by irina.galasanu@mxp.ro, 23.08.2007

More new cars, sold in Romania
New car sales topped 200,000 units in the first seven months of 2007, registering a 23.3% increase compared to the same period last year, according to data published on Monday by the Automotive Manufacturers and Importers Association (APIA).
In the first seven months, 177,685 cars were sold, up 22.4% compared to the 145,154 units sold in the same period last year. The sale of commercial vehicles also rose by 28.8%, to 27,095 from 21,042 units. Total car sales amount to 206,089 units, up 23.3% from the 167,126 units sold in the same period last year. July sales increased by 3.1% compared to the 35,995 units sold in June.
APIA reports that 143,651 units were produced domestically in these seven months, 10.9% higher than the 129,000 cars produced in the same period in 2006. Exports also rose by 42.8%, to 69,457 units, while in the same period last year Romanian producers exported only 48,636 units, reads APIA's statistical report.
January-July 2007 registered a 55% increase in imports, to 132,650 cars from 85,594 units in 2006. Romanians bought 297,162 cars last year, including commercial vehicles, 15.9% more than in 2005, when they bought 256,000 cars. The sale of new imported cars rose by 53.3% in the first seven months, to some 109,000 units, while domestic brands registered a 7% drop, according to APIA data.
By Business Standard, 25.08.2007

RABOBANK prepares for Romania
The Dutch RABOBANK, one of Europe's top banks, which has announced to the National Bank of Romania (BNR) its intent to enter the domestic financial services market, has operated transactions worth about EUR 120 million in RON, most of which with a five-year maturity.
"In the first half of 2007, our reference transactions were ones for which we bet on the Czech and Romanian currencies. With regard to the RON, our exposure is as high as RON 400 million (approximately EUR 121 million) and involves financial operations extending over three to five years", reads one of the bank's internal documents. RABOBANK officials notified BNR, at the end of June 2007, of their intention to run two types of operations in Romania, through their Ireland-based subsidiary: consumer and mortgage loans, as well as deals on the factoring market.
The Dutch bank is in full negotiation process with other banking institutions, confirming its intent to play a part in the consolidation process of the European banking system. RABOBANK has a 25% share of Holland's mortgage loans market, 39% of the savings market, and operations in the US, Australia, India, and other countries.
By Business Standard, 24.08.2007

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