	XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER No. 94, October 11th, 2007 Click here to subscribe! Click here to unsubscribe!
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EDITORIAL

THE REAL WINNERS

We will soon celebrate the 20 years that are necessary to a real change, one that should be made to the people's mentality. This period of time was forecast in the early '90 by a famous political analyst.
Being a wiser and more careful observer of the insurance and private pensions markets, I don't use to make too often prognosis and forecast, as the mentioned character, because I do not consider this to be my role.

But, until this autumn of private pensions, I hadn't had the sharp sensation that something very important is happening to all of us.

It is reassuring to see that the private pensions supervisory authority respects the announced calendar and creates the legal frame, that the large companies from this sector are recruiting over night armies of sales forces, and, are creating, incredibly fast, marketing, advertising and communication campaigns. I consider that the true winners of this autumn will be only those companies that will use the collecting period for the IInd Pillar - a signature that does not financially oblige the contributor that brings a supplementary income at the old age, to promote the IIIrd Pillar.

And, most of all, I have the certitude that the real winners will be the young people, that will complete, in due time, a unit-linked insurance, that will make them, at the age of 60, smile like the shiny old people from the Western commercials.

by sergiu.costache@mxp.ro

EDITORIAL | INTERVIEW | TOP PRESS | CEE, RUSSIA & CIS | FINANCIAL NEWS

INTERVIEW

Interview with Mrs. Angela TONCESCU,
President,
The Insurance Supervisory Commission

XPRIMM: We have good reasons to believe that 2007 will stay a reference year for the development of the Romanian insurance market. Apart from the trends seen after Romania's accession to EU, relevant legislative measures aimed at regulating this market have either been adopted, or are very close to the implementation stage, such as: the adoption of the amicable report for motor insurance, the Law on compulsory home insurance etc. How is the market going to behave / react to these changes, especially since many experts from insurance companies still have some objections with regard to the provisions of the above-mentioned regulations and foresee major difficulties with their respective implementation?
Angela TONCESCU: The amendment of Law no. 136/1995 on insurance and reinsurance in Romania, by the introduction of the amicable report in case of traffic accidents and Law on compulsory household insurance represent 2 entirely new regulations for the Romanian financial sector.
Hence, their implementation shall be a challenge not only for the insurance market, but also for the relevant supervisory and regulatory authority.
However, we are persuaded that the improvement of the legislative framework by adding new elements - the amicable report being already a procedure used in the developed countries - shall clearly assist the Romanian insurance market and provide for its strengthening and development, as well as for a faster harmonization with the European legislation.
Considering the innovative character of these drafts, some inconsistencies might occur upon their implementation, even though major joint efforts have been made when they were drafted, as the representatives of the insurance market were consulted in this respect.
Given this perspective, we believe that any law is subject to improvement, and in case subsequent objections appear with regard to the new legislative regulations, the initial draft shall be reviewed in order to identify common solutions.

XPRIMM: What steps should be taken in order to consider the Romanian insurance market a mature one? What does your institution plan to do in this respect?
A. T.: Solvency II is the new European legislation proposed to regulate the capital requirements for the insurance market, thus strengthening the prudential regime for insurers. Legally, the main objective of ISC is to protect the insured person by maintaining the financial stability of each entity within the system it regulates and supervises.
In the recently adopted strategy for 2007 - 2011, the ISC Board considers that the training of the staff and the support offered for the training of all people working in insurance are considered prerequisites for meeting the objective of this strategy: implementation of the provisions from the Solvency 2 Directive.
In order to have an in-depth assessment of the new solvency regime on the European insurance market, CEIOPS launched a set of qualitative impact surveys (QIS), focused on an internal approach of the potential impact of the new solvency system.
In this respect, the Insurance Supervisory Commission organized in May, this year, a professional training session on the topic "The implementation framework for the new Solvency II concept and methods for conducting QIS 3", with a participation - together with the ISC experts - of approximately 150 persons, namely 2-3 specialized representatives from each insurance company.
To heighten the visibility of the supervisory authorities in the two member states that recently acceded to the EU, CEIOPS proposed and was granted the approval for organizing a Regional Seminar on Solvency II, in Bucharest. This will take place in June 2008, for a period of two days and shall focus on issues encountered by the supervisory authorities in the Solvency II implementation process.
Thus, we would like to invite small and large insurance companies to take part in the impact survey (QIS 4) prepared by CEIOPS and to draft their own evaluations of the potential impact that the new regime shall have on them.
We must draw the attention on the fact that the insurance companies and the entire Romanian market have all the interest in getting involved, otherwise running the risk of losing the right to file complaints regarding the potential deficiencies of its application.

XPRIMM: Over the past several years, consistent steps have been taken in order to make the Romanian brokerage market a professional one. How would you describe this market and what are the steps to be taken next, in your opinion?
A. T.: In order to make the Romanian brokerage market a professional one, ISC took a first step by issuing the Norms (approved by Order no. 10/2007) on the registry of insurance and/or reinsurance brokers.
The norms concern the opening and keeping, by ISC, of a registry with all legal entities and natural persons acting as brokers of insurance products, on behalf of the insurers or customers, insured or potential insured. This action is aimed at increasing the degree of protection for the insured by making the seller become more responsible in their relation with the customer.
The norms also regulate the obligation of the persons in the registry to obtain a professional training certificate within three years from the entry into force of the norms on accreditation of entities that organize professional qualification and advanced training courses, this representing one of the minimum requirements imposed by the Directive EC no. 92/ 2002, in order to be included in this registry.
ISC intends to strengthen the confidence in the insurance system, as well as to enhance the prestige of all people active in this system.
The development of the brokerage market shall greatly depend on the increase in the level of professional training of brokers, on the quality of the services they provide, on whether they understand that being a broker means not only mediation work, but also being a good consultant, able to present and explain the customer the insurance offer that suits best their needs.

XPRIMM: The supervisory authority is also an entity undergoing continuous development. How would you describe the current stage in the functioning of the ISC and what are the directions you plan to follow for the development of the institution?
A.T.: The fact that Romania is currently one of the EU member states, with an insurance penetration rate in the Gross Domestic Product lower than the European average, points out even more the need of an efficient use of own resources and community funds in order to change the behaviour on the insurance market, as well as to inspire and develop it.
One of the objectives recently set in the Strategy of the Insurance Supervisory Commission for 2007 - 2011 is the strengthening of the institutional capacity of the Insurance Supervisory Commission.
To protect the insured's interests and to provide for the market's stability and development, as well as to continue the transposing and implementation of the European legislation on the Romanian insurance market, ISC has the obligation to modernize and develop its operational capacity, to create the conditions necessary for the staff education and training system, in accordance with the European requirements, as well as strengthen the administrative capacity for the implementation of the community acquis.
At European and international level, ISC takes action for an increased visibility, making use as much as possible of the EU membership, recently acquired by Romania, ensuring an active presence during the working sessions of the specialized commissions and committees of the European Commission and of the international Association of Insurance Supervisors (IAIS).
Not only do we have something to learn from the experience of other countries with a long tradition in insurance, but we shall also try to bring our contribution, together with the other supervisory authorities from the European Economic Area.
In order to reach specific common objectives, the ISC shall form alliances with the member states that have similar interests to Romania (e.g. the supervision of insurance groups).

XPRIMM: According to the general opinion, most of the problems facing the insurance market are also generated by the yet low level of information available to the public in this field. Furthermore, there are voices that say all the entities acting on this market - operators, professional associations, even ISC - should get more deeply involved in educating the public, thus supporting the market development process. In your opinion, what should be done in this field? Does ISC have the duty and the capacity to pull together all market resources in this respect?
A.T.: The Board of the Insurance Supervisory Commission has decided to establish, as part of the regulatory authority, a structure in charge with the professional coordination of all those that already work or are going to work on the insurance market.
On a medium term, the intention is to make sure that a new job or professional promotion to a new level are based on a professional training certificate and, respectively, a continuous professional training certificate.
This project is now on the table of all relevant ministries and shall be promoted by a governmental decision.
The name proposed for this structure is the Insurance Management Institute (IMI) and this will fulfill the prerogatives granted by law to the Insurance Supervisory Commission in the field of professional training.
The ever increasing level of professionalism of all those working on the insurance market shall provide for high quality insurance services and shall lead to a higher trust of the population in the insurance products, to a raised level of awareness with regard to the advantages and the benefits generated by the insurance policies.

XPRIMM: Thank you!

by daniela.ghetu@mxp.ro

Mrs. Angela TONCESCU,
President,
The Insurance Supervisory Commission

EDITORIAL | INTERVIEW | TOP PRESS | CEE, RUSSIA & CIS | FINANCIAL NEWS

TOP PRESS

Strategic partner for WORLD BANK
"Media XPRIMM is the only private entity that WORLD BANK constantly collaborates within the organization of some events (WORLD BANK was co-organizer of 3rd and 4th edition of The International Catastrophic Risks Forum), Eugene GURENKO, Lead Insurance and Risk Management Specialist of WORLD BANK stated.
"This decision was made taking into consideration the great organization services provided by Media XPRIMM, but also the constant efforts made for the awareness's increase concerning the catastrophic risks", Eugene GURENKO concluded in the end of the 4th edition of ICAR Forum.
"We have decided to be co-organizer of ICAR Forum as to express our support in finding the solutions for the program of decreasing the negative effects of catastrophic risks", Eugene GURENKO added.
"We wish to thank both WORLD BANK and representatives of Ministry of Interior and Administrative Reform, without whose support this event wouldn't have happened", Sergiu COSTACHE, General Director of Media XPRIMM declared. He also affirmed: "Moreover, ICAR had the support of important partners, whom we want to thank".
Click here to download the presentations!
by mihaela.circu@mxp.ro, 3.10.2007

Still a controversial law...
"Starting from the social nature of the mandatory household insurance law and from the negative effect it might have over the compensation process I consider that in the actual form of the law project, introducing the deductibility is not the best solution. I hope the Legislative council will find the best resolution in this matter for the law to be, in the end, useful and advantageous for the population", Dan CONSTANTINESCU, Member of the Insurance Supervisory Commission Council stated at ICAR - The International CAtastrophic Risks Forum.
" From the insurers' point of view the idea of this law is very good, but there are still technical issues to be correlated with the insurance industry mechanism. We want to set off that assessing the premium rate and the commission payment levels in the law is not technically justified and to express our concern that the law might be enacted in the actual form", pointed out Florentina ALMAJANU, General Director of UNSAR - The National Association of Insurance and Reinsurance Companies from Romania.
With regard to the technical issues in the normative act, Radu Mircea POPESCU, Councilor of the Ministry of Interior and Administrative Reform, has declared:
In appraising the insurance premiums' level we base on a report made in partnership with RMSI: in this context we have two alternatives: either to double the insurance premium from 10 to 20 EUR and, accordingly, form 20 to 40 EUR, or to introduce the deductibility set between 5% and 10%. For now, I doubt there's any chance for the assessed level of the premiums to be modified by the Parliament but according to how will the system work in the first year, all needed amendments will be adopted.
An international point of view in this particular charged issue of introducing deductibility was expressed by Patrick DELALLEAU, Senior Vicepresident, Caisse Centrale des Reassurances (CCR).
"I think this law must be enacted in a viable form from the very beginning. The insurance premium must be settled from the initial moment at an accessible level for all future clients, a level able to support, at the same time, the financial stability of the insurance market and all other parties involved. In the case all these aspects will be considered from the very beginning, I completely agree with introducing deductibility, at a reasonable level", the French official has stated.
by andreea.ionete@mxp.ro, 2.10.2007

Third party liability insurance more expensive?
In 2007, premium tariffs for the third party liability insurance might grow.
Thus, "a new analyze of the premium tariffs by each authorised insurers is needed taking into consideration the big number of road events which happen outside the Romanian's border and which have an average of claims 3 or 4 times bigger than in Romania", Angela TONCESCU, President of CSA, stated during the debate meeting called "Dialog and solutions for the insurance market's development from West region".
Also, the limits of indemnity will grow in 2009. Practically their value will double in comparison to this year.
"Thus, this thing implies a reappraisal of the insurance premiums' tariffs for the third party liability insurance, meaning to be raised", Angela TONCESCU highlighted.
For 2008, it is expected for insurers to raise the premium's tariffs for third party liability considering the limits indemnity's enhance with 50% in comparison with 2007.
The President of CSA emphasized that CSA will continue the series of harmonization measures of the national legislation with the European Directives in the field. So, a series of provisions as to make professionally the Romanian brokerage market will come into force in the following period, after they are approved by the Parliament.
CSA has made the first step by emitting the Norms regarding the Insurance and/or Reinsurance Mediators' Register, approved through the Order no. 10/2007.
"These norms establish that CSA will keep a register with all legal and natural persons who mediate in the insurers' name or in the name of insured clients or potential clients insurance products. This way, one intends to raise the protection degree of insured persons making the seller responsible in his relation with the client", the quoted official added.
Moreover, the norms obligate registered persons to obtain a professional certificate in 3 years from the day the norms of accreditation of entities that organize specialized courses come into force, to be registered being one of the minimum requests of European Directive no. 92/2002.
by mihaela.circu@mxp.ro, 5.10.2007

A healthy and efficient scheme
With the occasion of ICAR 2007, the World Bank's representatives expressed their contentment as co-organizers of the event that the upshot of the cooperation with the Ministry of Interior and Administrative Reform comes more and more closer to a real result.
"The World Bank has involved in developing the Romanian Disaster Insurance Program by according technical and theoretical assistance; we managed to co-opt in this action specialists from regions renowned for the activity in catastrophic risks management - Caribbean Islands, Asia and Europe - which brought the global practices in the efficiency and celerity of setting out this program in Romania", stated Gabriel IONITA, Senior Agriculture and Irrigation Specialist ECSSD, The World Bank, Romania.
"The current legislative initiative should respect the interests of every involved party in the pre and post-catastrophic event process. Considering the effects a catastrophic event might have here, dividing the risk between the state and the private sector is obviously needed; the insurance industry can mobilize more easily as for the population to benefit from compensation and reconstruction fund much faster.
Therewith, the flexibility of the organisms that will put together the Natural Catastrophes Insurance Pool should be sufficient for supporting the programs' financial stability", the official added.
"Everything the World Bank has done to encourage this program, from the financial investment to the technical support, aims at introducing a healthy and efficient scheme", Eugene GURENKO, Lead Insurance and Risk Management Specialist, The World Bank, has concluded.
Eugene GURENKO is one of the initiators and main partners of the catastrophic risk transfer national system development in Romania and an active traditional participant of the ICAR Forum as well.
by andreea.ionete@mxp.ro, 2.10.2007

GROUPAMA, exclusively negotiating for the acquisition of BT Asigurari
Banca TRANSILVANIA and GROUPAMA, one of the biggest European insurance companies, are negotiating the sale, respectively the acquisition of BT Asigurari.
For the acquisition of this, other several foreign financial groups that want to invest in insurance or to extend their activity on the Romanian market, has also registered.
BT Asigurari is part of the Financial Group Banca TRANSILVANIA. Established in 1994, under the name of SAR Transilvania, BT Asigurari has defined as activity object the sale of insurance products addressed to all kind of clients, both companies and natural persons. Its central headquarter is in Cluj Napoca and has a national network of 300 units.
BT Asigurari is in Top 10 insurance companies in Romania and ended the first semester of 2007 with RON 132.3 million business figure, almost EUR 40 million, up with 44% comparing to the similar period of 2006.
GROUPAMA, the negotiating company for BT ASIGURARI, is on the third position in the chart of French profile companies. Present on the market since the XIX. Century, it started its activity as insurance mutual company and continued developing as modern company which offers all range of insurance products in France. It also has branches in China, Greece, Italy, Great Britain, Portugal, Spain Turkey, Hungary and Vietnam. The amount of income in 2006 was EUR 14.2 billion.
Banca TRANSILVANIA is assisted in the sale process by CAPITAL PARTNERS, DELOITTE and MUSAT&ASOCIATII.
by mihaela.circu@mxp.ro, 8.10.2007

Favorable moment for Pillar II
At almost one month from the official debut of the collecting period on Pillar II, Timisoara was the host of the greatest Regional Forum dedicated to Private Pensions.
"The phase reached by the Romanian society is favorable for the compulsory private pension system's introduction", Dan PESCARU, General Director of CSSPP declared.
"I am content with the fact that the first phase of reporting ended well without major problems to be registered. I want to draw attention upon the second principal problem, which is the deadline for the nominal declaration's handling in and how should be fulfilled the declaration by the employer. Together with ANAF, we have elaborated a more efficient control system regarding the money giro", Mariana CIMPEANU, President of CNPAS, mentioned.
The Forum was organized by the PRIMM Insurance&Pensions Magazine, with the support of the Supervisory Commission of Private Pension System and its main purpose is to inform employers about the importance of private pension in gaining the employees' devotion.
In the same day, at NH Hotel, took place another event called INSURANCE DAY.
Both events were attended by the representatives of Insurance Supervisory Commission and of Supervisory Commission of Private Pension System, by local branches' leaders of the profile companies and of the insurance brokers from Timisoara and near districts, by important political personalities, by important operators from private pension' s field, by local and national media and employers from the region.
by oleg.doronceanu@mxp.ro, 10.10.2007

An honouring partnership
PRIMM Insurance&Pensions Magazine is Media Partner for the second time in the row of 2007 edition of the annual conference of the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS). The event will take place in Frankfurt, on 20 November 2007 within the context of the EURO FINANCE WEEK.
The prime purpose of the CEIOPS Conference remains the transparency of CEIOPS' work and progress and to strengthen communication with the industry and all interested parties. The main topics for discussion will be covered in three panel sessions and will relate to the assessment of CEIOPS' role as a Level 3 Committee in the Lamfalussy process, the progress of the Solvency II Project - including QIS 3 and lessons to be learnt from the results - and the implementation of the Pension Funds' supervisory regime.
With more than 400 C-level participants of the insurance industry and representatives of regulatory and supervisory authorities as well as numerous organisational structures the CEIOPS Conference is the central discussion forum of politics and insurance industry in Europe. Among the speakers are EU Commissioner Charlie MCCREEVY, the Portuguese Secretary of State for Treasury and Finance, Carlos Costa PINA, CEA President Gerard de la MARTINIERE, AISAM President Patrick PEUGEOT, EFRP Chairman Jaap MAASSEN as well as high ranking insurance experts of the EU Commission.
Further information can be found under www.ceiops-conference.org and www.eurofinanceweek.com.
by daniela.ghetu@mxp.ro, 11.10.2007

OTP Garancia, under the umbrella of AXA?
The insurance companies OTP Garancia might be sold to the AXA giant, according to some information that circulates in the Hungarian press.
Representatives of the Hungarian bank, quoted on the portfolio.hu site, have confirmed they have negotiations as to find a strategic partner for the insurance division.
"Discussions are at the beginning and there isn't any certainty they will end with a transaction", it is highlighted in the press release of OTP Bank to the Exchange Stock from Budapest.
"We believe that a strategic partner in insurance field is vital to succeed in gaining on this segment a position at the level of the bank market's weight", Laszlo URBAN, Deputy CEO of OTP Bank has stated.
The OTP Group is represented on the Romanian insurance market by OTP Garancia, which underwrote in the first semester of 2007 RON 9.24 million gross premiums, meaning a 48% growth comparing to the similar period of the last year.
Also, the officials of OTP Garancia have declared that the investments made for the company's development led in the first half of this year to looses of RON 4.62 million, paid claims reaching RON 3.07 million
by mihaela.circu@mxp.ro, 10.10.2007

ISC establishes a Management Institute in Insurance
The Insurance Supervisory Commission (ISC) has decided to establish a Management Institute in Insurance, fulfilling its prerogative in the professional preparation field conferred by law.
"The Council of Insurance Supervisory Commission has decided the establishment of a coordinator for the professional preparation of those who will work or work in insurance field within the regulatory authority", Angela TONCESCU, President of Insurance Supervisory Commission, stated during the debate meeting called "Dialog and solutions for the insurance market's development from West region".
On medium time, we want one to get a job or to be promoted as a result of obtaining a professional qualification certificate and advanced training certificate. This project is during the appraisal process at the ministries involved and will be approved through a Government Decision", the quoted official added.
The meeting from Timisoara is part of a series of events organized by CSA for the celebration of 15 years of supervision in insurance in Romania, representing the fourth direct contact in territory after debates in Cluj Napoca, Iasi and Constanta.
Aurelia CRISTEA, Member of ISC, was the moderator of the conference and Gheorghe CIUHANDRU, the Mayor of Timisoara was special guest.
The PRIMM Insurance&Pensions Magazine was represented at the event by Sergiu COSTACHE, General Director.
by mihaela.circu@mxp.ro, 4.10.2007

Pillar III comes near RON 2 million
The net assets administrated by the funds operating on Pillar III reached a volume of RON 1,856,746 on 28th of September 2007, up with 25.49% comparing to the previous week, according to data communicated by the Supervisory Commission of Private Pension System.
Thus, by the end of September, 14,543 Romanians have opted for a pension fund on Pillar III. The leader of this segment continues to be ALLIANZ TIRIAC Pensii, with around RON 1 million assets (almost 50% of volume of assets) and 7,977 participants for both administrated funds (AZT Moderato and AZT Vivace).
The second position is held by ING Asigurari de Viata, also with two funds, ING Clasic and ING Optim.
According to data released by the Supervisory Commission of Private Pension System, at present, four companies offer six facultative pension funds.
by mihaela.circu@mxp.ro, 8.10.2007

Towards a 100 per cent claim rate
Claim rate in agricultural insurance could exceed, in 2007, the 10% threshold, taking into consideration the strong hailstorms that hit Romania in early September.
This conclusion, expressed by Maura KLASSEK, a renowned specialist in this field, was presented during the second day of ICAR-The International CAtastrophic Risks Forum.
"2007 is the first year when the claims rate is really high, as from 1993 Romania reported an average claim rate that did not outrun 65%", Maura KLASSEK pointed out.
Gross written premiums in agricultural insurance rose to RON 53.7 million in the agricultural year 2006-2007. At the same time, claims paid by 31st of July this year valued RON 48.3 million. The analysis made results in a claim rate of 90%.
"We appreciate the insured arable land surface at 1.5 million hectares, which stands for 17% of the total arable land in Romania", Maura KLASSEK highlighted.
Companies which write agricultural insurance have no more than 6,000-7,000 clients, most of them farmers who own over 100 hectares, as for the weight of peasants with smaller parcels, this is really insignificant.
The Ministry of Agriculture and Rural Development agreed so far with thirteen insurance companies which write agricultural insurance: AGRAS, ALLIANZ-TIRIAC, ARDAF, ASIBAN, ASIROM, ASITRANS, ASTRA-UNIQA, BCR Asigurari, CARPATICA Asig, FATA Asigurari, GENERALI Asigurari, OMNIASIG and UNITA.
by mihaela.circu@mxp.ro, 3.10.2007

EFG Eurolife, officially in the Romanian insurance market
Greek financial group EFG Eurobank, the majority owner of BANCPOST, has officially entered the insurance market in Romania on October the 2nd, along with launching two companies: EFG Eurolife Asigurari Generale and EFG Eurolife Asigurari de Viata.
The investment made the group rise up to RON 24.12 million.
In the first stage, the two companies will offer life and property insurance attached to credit products, and afterwards will extend their services with insurance products for small and middle market companies.
In the future, the Romanian EFG insurers will also develop other distribution channels (brokers and marketing agents) besides the banks' network, according to statements made by the companies' representatives.
The Greek financial group has extremely ambitious targets for the Romanian market:
"We aim to climb in the Top 3 life insurers in Romania in the next five years. It is a pretty high flying objective but it can be done", Anita NITULESCU, General Manager EFG Eurolife Asigurari de Viata has declared.
by oleg.doronceanu@mxp.ro, 3.10.2007

TRIGLAV, at Romania's gates
TRIGLAV, the largest insurer in Slovenia, will enter the Romanian insurance market in the wake of its strategy of expanding its operations in the Balkans.
Thus, according to statements made by Andrej KOCIC, the companies' Chairman of the Management Board and CEO, the Slovenian group intends entering the insurance markets in Romania, Bulgaria and Albania.
The move is prompted by the groups' aim to establish itself as a market leader in the Balkan countries.
TRIGLAV has the capabilities, the skills and the experience to be the biggest and the best insurance company in the region and will try to prove it, according to KOCIC.
Ljubljana-based TRIGLAV, the oldest insurance company in Slovenia is leader in South Eastern Europe (Slovenia, Macedonia and Montenegro) with a 22-percent market share. The gross premium income of the company amounted to EUR 813 million in 2006.
by andreea.ionete@mxp.ro, 1.10.2007

The European Pension Funds Congress, in Frankfurt
PRIMM Insurance&Pensions Magazine is Media Partner for the second time in the row of the European Pension Funds Congress.
The event will take place in the context of the 10th EURO FINANCE WEEK and will be host by the European Federation for Retirement Provision (EFRP), on Wednesday, 21st November 2007.
The main purpose of the conference is to gather views on how the European supplementary pension landscape has changed since the implementation of the IORP Directive.
Frankfurt will also be the place where EFRP unveils its position on the link between the Solvency II proposal and the IORP Directive.
Other topics addressed this year will be "alternative investments for pension funds" and "market development in the CEE region".
With more than 150 C-level participants of the European pension funds industry and representatives of EFRP's member associations, the European Pension Funds Congress is the central discussion forum of the pension funds industry in Europe.
Among the speakers are the OECD Deputy Secretary-General Aart Jan de GEUS, Peter HADASCH, Board Member of Nestle Pensionskasse, Chris VERHAEGEN, Secretary General of EFRP, Dr. Heinz J. HOCKMANN, CEO of FORTIS Investment Management, Wil BECKERS, Managing Director of DSM Pension Services, Carol KENNEDY, Senior Partner PANTHEON Ventures, and EU Officer Erich EGGENHOFER.
Further information can be found on www.eurofinanceweek.com.
by daniela.ghetu@mxp.ro, 11.10.2007

EDITORIAL | INTERVIEW | TOP PRESS | CEE, RUSSIA & CIS | FINANCIAL NEWS

CEE, RUSSIA & CIS

KBC intends to expand its business in Europe
Belgium-based group KBC intends to acquire a bank in Bulgaria as well as an insurance company or another bank in Serbia, Head of KBC press service Viviane HUYBRECHT had stated.
"Although KBC has already made a series of new acquisitions for a total amount of EUR 1.4 billion in Central and Eastern Europe, our group is still interested in making a number of additional acquisitions in CEE within our acquisition criteria", said HUYBRECHT. "We are interested in a bank in Bulgaria (where KBC is already present through DZI Insurance), and an insurance company or another bank in Serbia (where we are already present through A Banka), which would fit in with our bancassurance concept", she added.
At the beginning of June, 2007, KBC completed the acquisition of a 100% stake in Serbia-based A Banka for EUR 96.5 million. According to KBC, A Banka accounted for 21.7% of credits given by Serbian banks in 2006 and for 32.4% of total amount of deposits. The bank operates through 18 branches and 26 departments based in all large and medium cities of the country.
Within the first half of 2007, KBC gradually increased its shareholding in one of Bulgaria's largest insurers - DZI Group. As the Belgian group announced on January 30, it acquired 70% in DZI from the Bulgarian holding company KONTRAKT Sofia for EUR 185 million. Another KBC's acquisition was DZI Bank purchased from KONTRAKT Sofia for EUR 75 million. In early August, KBC bought an additional 15% stake in DZI on the Bulgarian stock exchange for the total amount of EUR 40.2 million. On September 5th, KBC announced a public offer for the acquisition of the rest of DZI stocks at the same value as previously acquired 15%.
In Q1 2007, DZI's insurance premiums decreased 6.41% compared with the same period of the prior year, totaling EUR 9.6 million. The company ranked second both in life and non-life segments, accounting for 21.25% and 14.74% respectively. DZI's net income in Q1 2007 amounted to EUR 0.7 million, 46.5% down on January-March 2006.
In the first nine months of the current year, KBC purchased majority stakes in some investment brokerage companies such as EQUITAS (Hungary), SWISS Capital (Romania), INK Broker (Romania), BALTIC Investment Company (Baltic States), increased its interest in Czech-based bank CSOB to 100%, acquired 95% in Russia-based ABSOLUT Bank and 99.34% in the Romanian leasing company ROMSTAL Leasing.
by irina.galasanu@mxp.ro, 20.09.2007

FITCH evaluates TRANSSIB Re
The rating agency FITCH had affirmed the stability of the Russian reinsurance company TRANSSIB Re at the international 'B+' level. The outlook of the rating is stabile.
This evaluation reflects good operational indicators of the company, a regional business diversity, an improvement of the credit quality of the investment portfolio, and also an experienced managerial team.
The FITCH experts expects the TRANNSSIB Re's profitability to be maintained at a good capital rentability level (ROE=28.7%).
by irina.galasanu@mxp.ro, 8.10.2007

SOCIETE GENERALE enters the Russian insurance market
The insurance division of French SOCIETE GENERALE had been authorized to start the activity of the company SOGECAP Life Insurance on the Russian market.
Also, SOCIETE GENERALE Insurance had announced the finalization of the acquisition of the Russian insurance company SOIUZNIK.
In Russia, the French group integrates the following companies: SOCIETE GENERALE East Bank, DELTACREDIT, RUSFINANS Bank, SKT Bank, intending to acquire the majority stake in ROSBANK.
The local life insurance market is being very attractive lately. The experts consider that this insurance class has the great evolution and growth perspectives and in a couple of years it will be passing a real explosion. Currently, on this market in Russia activates a lot of companies owned by international groups, like ACE, AIG, ALLIANZ, AVIVA, ING and FORTIS.
by irina.galasanu@mxp.ro, 10.10.2007

Partnership between BIPAR and LIOU
BIPAR (The European Federation of Insurance Intermediaries) and LIOU (League of Insurance Organizations of Ukraine) have started collaboration aiming to increase the importance of the Ukrainian insurance brokerage market.
At the beginning of this month, Alexandr FILONIUK, LIOU President, and Nic de MAESSCHALCK, BIPAR Director have discussed about the possible collaboration between these two organizations.
In this context, they had decided to organize next year within the 8th Edition of The International Yalta Forum dedicated to the insurance market a specialized conference dedicated to the brokerage industry
Also, the conference will be supported by The Ukrainian Federation of Insurance Intermediaries. This event will help to debate the problem of intermediaries' institutes' development in the world and will help the Ukrainian brokerage industry to amount to an international level.
by irina.galasanu@mxp.ro, 11.10.2007

EDITORIAL | INTERVIEW | TOP PRESS | CEE, RUSSIA & CIS | FINANCIAL NEWS

FINANCIAL NEWS

The Government adopted the 2008 budget
Social security, health and education are the main sectors to benefit from funds 27% higher than last year, according to the draft budget for 2008.
The government approved the draft budget in yesterday's meeting, subsequently to be debated and passed by Parliament.
According to the draft, 6% of GDP is to be allocated for education, while a further 4.5% will go for health. Funding for both sectors will be 27% higher than last year. Some 0.6% of GDP will be allocated for research and innovation.
"It is a budget for Romania's development. It complies with the interests of all social classes and Romania's development needs," Prime Minister Calin POPESCU-TARICEANU told a press conference following the government meeting. Health Minister Eugen NICOLAESCU said he was satisfied with the draft budget.
"We have obtained almost one billion euro more for health," he said. The draft budget is based on a Gross Domestic Product (GDP) worth EUR 7,000 per capita. GDP is expected to rise 6.5 percent year-on-year in 2008, to EUR 138 billion, compared to EUR 58 billion in 2004.
by hotnews.ro, 11.10.2007

Romania climbs 23 positions in top of business-friendly countries
Romania ranks 48th, following Bulgaria and Hungary in a top including 178 countries providing most favorable conditions for doing business, up 23 positions from 2006, according to the "Doing Business 2008" report of the World Bank.
The 2007 report includes Romania among countries which made positive reforms in fields such as loan granting and tax payment, and negative reforms in the area of starting a new business.
The best position Romania obtained (13th place) was on loan granting. Romania ranked in the top half of the list on investor protection (33rd place), international commerce (38th place), and contract applicability (37th place). Despite a significant advance in the 178-country top, Romania is still surpassed by states such as Estonia, Latvia, Hungary, and Bulgaria.
The "Doing Business 2008" study does not include Romania among top ten reforming countries. In the 2007 report, Romania ranked second among world countries with best performances in terms of economic reforms between 2005-2006, and first in a regional top. Countries in Eastern Europe and the former Soviet Union, together with several emerging countries, including China and India, developed most reforms in the business environment between 2006-2007. In terms of taxes, one third of the 178 countries developed reform programs in 2006 and 2007, and tax cuts was the most popular reform method. The second-best was lowering the number of taxes followed by simplifying payment procedures by introducing online statements and payments. The report indicates that Bulgaria made the most numerous fiscal reforms in 2006-2007 by cutting the profit tax ratio to 10 percent from 15 percent.
by Business Standard, 28.09.2007
by Business Standard, 28.09.2007

RAIFFEISEN will open a branch every working day in 2008
RAIFFEISEN Bank, the third-largest player in the Romanian banking system in terms of assets (EUR 5 billion), will invest at least EUR 24 million in network expansion, to raise the number of new branches by 220 by the end of 2008, according to the lender's estimates.
"We intend to open one branch for each working day of 2008. We also target to increase our market share next year, from its current level of 8.9 percent," said Steven van GRONINGEN, President and CEO of RAIFFEISEN Bank.
According to sources on the market, average spending to open one new branch reaches EUR 110,000, if the location is rented.
RAIFFEISEN Romania, the local subsidiary of the Austrian financial group, had 337 units by the end of the first half of 2007, and 5,145 employees, according to a report of the mother company.
"We have a medium-term strategy with objectives correlated to market conditions. We will improve profitability and drop the cost/revenue ratio," added GRONINGEN.
RAIFFEISEN Romania posted a significant advance especially in terms of net income from fees, which registered the highest growth rate of all countries in the region in which the Austrian group is present.
The bank's net profit increased 2.7 times in H1 2007, compared to H1 2006, up to EUR 47.2 million, due to network expansion, a medium cost increase, and higher revenues from loans, the lender informed on Thursday.
The Romanian subsidiary of the RAIFFEISEN Group made large deposits at the National Bank of Romania (BNR), contributing significantly to a 7.4 percent increase, up to EUR 8.8 billion of total loans to other banks of RAIFFEISEN International, the business division of the RAIFFEISEN group outside Austria. The RAIFFEISEN Group also operates on the Romanian market through RAIFFEISEN Banca pentru Locuinte, RAIFFEISEN
Leasing, RAIFFEISEN Capital & Investment, RAIFFEISEN Asset Management, and RAIFFEISEN Investment Romania.
by Business Standard, 8.10.2007

MILLENIUM, on the Romanian market
The Portuguese bank MILLENIUM BCP has entered, today, 11th of October, on the Romanian market. It plans to open 40 units here, according to Forbes. The Bank will invest about 40 million euro in 2007 and by 2011 the total investments will amount to 200-250 million EUR.
The Bank targets medium sized companies and will process retail banking operations.
MILLENNIUM Bank expects to become profitable by 2011 while for 2007, the estimated losses would total some 30 million EUR. The bank has been testing its bank system since September 21, 2007.
by costi.boroda@mxp.ro, 11.10.2007

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