XPRIMM: How do you evaluate the company's performance at the end of the current year?
Andrey T. UNTON: For the first three quarters of 2014, the results of BELARUS Re can be described as positive as evidenced by the following financial results.

5,993 reinsurance contracts were entered into during the reporting period. The amount of premium written on inward reinsurance was BYR 277,5 billion, including BYR 42,5 billion of the reinsurance premium, received from international markets, the growth is 120.7% in comparison with the third quarter of the last year.

Within the total amount of the reinsurance premiums the largest share was taken by industrial property insurance - 32.2%, motor third-party liability insurance in the system of "Green Card" - 15.7%, aircraft owners' third party liability insurance - 8.6%, aircraft insurance - 7.0%, credit risks - 5.3%, CAR/EAR - 2.2%, customs authority liability insurance (TIR) - 2.0%, cargo insurance - 1.4%, export credit insurance - 1.3%.

Reinsurance premium earned on treaty contracts amounted to BYR 71.4 billion, on facultative contracts - BYR 206.0 billion.

The assumed liability as of 01.10.2014 made BYR 33,337.209.4 billion exceeding 1.5 times the level of the same period of the last year.

BELARUS Re paid its share of the reinsurance indemnity in the amount of BYR 22.3 billion that is 8% of the reinsurance premium, while BYR 5.5 billion or 24.4% of the total amount of the reimbursement paid is a share of the Reinsurers.

The combined ratio for the 9 months of 2014 made up 24.8%. The company's administrative expenses totaled at BYR 25.1 billion or 9.0% of the risks assumed. The level of finance and economic profitability is 18.8%.

XPRIMM: How do the results of the company reflect the existing strategy?
Andrey T. UNTON: The establishment of the international-level reinsurance company with a full range of reinsurance services to offer and comprehensive protection of its clients to ensure in accordance with international standards is the main development strategy of BELARUS Re in 2014.

In order to diversify the reinsurance portfolio BELARUS Re has been actively involved in international reinsurance market, gaining experience in the field of international reinsurance and developing new avenues of cooperation with the range of foreign insurance (reinsurance) and broker companies. A number of foreign insurance (reinsurance) and broker companies were contracted in 2014.

With coherent transparency policy in mind, BELARUS Re continued its work with rating agencies in 2014. At the present time BELARUS Re works with a rating agency Fitch Ratings, that rates BELARUS Re at "B-", outlook stable. Fitch Ratings notes in its report that BELARUS Re maintains an exceptionally strong level of capital adequacy to its current business volumes, demonstrates strong underwriting results that is primarily due to favorable claims experience and conservative pricing in most lines of business.

International financial strength rating reflects the correspondence to the global development strategy and also to the conducted policy of openness and transparency to the international standards.

In 2014 BELARUS Re took measures to ensure domestic insurance market with strong reinsurance protection, to participate in the most significant investment projects carried out on the territory of the Republic of Belarus.

One of the components of the expansion of cooperation of BELARUS Re with Belarusian insurance companies is the acquisition of retrocession cover. In 2014 it has allowed to build a more balanced portfolio of BELARUS Re as well as to strengthen financial sustainability for insurance companies, be active while using equity of the national insurers and also to optimize costs of the state enterprise on acquisition retrocession cover abroad.

The company's marketing policy was activated in 2014 with participation in conferences. The policy aims at improving BELARUS Re recognition and shaping company's image on domestic and foreign markets. In order to increase the professionalism of BELARUS Re personnel and its qualification special seminars like "Cargo underwriting" and "CAR/EAR insurance" were jointly organized by Belarusian Association of Insurers and Belarus Re in the context of exhibition "Bank. Insurance. Leasing". OJSIRC Moscow Re took part in the event.

XPRIMM: How profitable the local market is?
Andrey T. UNTON: According to the Ministry of Finances of the Republic of Belarus the net profit of Belarusian insurance companies for the last three quarters made BYR 529.4 billion, the growth is BYR 47.6 billion in comparison with the first quarter. By the amount of the net profit, BRUIC "BELGOSSTRAKH" occupies the first place with BYR 208.4 billion as of 01.10.2014 that is 1.6 times more in comparison with the same period of the last year. The second place is taken by RSUIE "STRAVITA" that has increased the net profit to BYR 71.2 billion by the end of the last financial year. The third place was given to BELARUS Re with BYR 51.4 billion in net profit. The share of these companies in the total amount of the net profit of the insurance companies of the Republic of Belarus as of 3rd quarter of 2014 is 62.5%.

In comparison with the same period of the last year as of October 2014 there is a slight decrease (0.78%) in the level of the net profit of the insurance companies of the Republic of Belarus as of October 2014. This is primarily due to the surge of "net loss". The total net loss of OJSIC "BAGACH", ILLC "ROSGOSSTRKH" and OJSC "B&B Insurance Company" amounted to BYR 51.3 billion as of 01.10.2014, where the share of the latter is 98.2%.

The remaining in the future positive dynamics of net profit, financial stability and solvency of the insurance market of the Republic of Belarus as a compound part of the financial credit system of the country will be the evidence of its growth in the system of socioeconomic and financial relations and the need for further increase in the level of insurance of persons and enterprises.

For the 9 months of 2014 contributions of Belarus insurance companies for direct insurance and coinsurance made up to BYR 5,408.1 billion. The growth of insurance contribution rate in comparison to the same period of 2013 made 111.9%.

Insurance payment compensation and insurance payment coverage throughout the republic made BYR 2,345.2 billion as of 01.10.2014 that is by BYR 343.7 billion more than in the same period of 2013. Of that facultative insurance accounted BYR 1,051.1 billion (44.8%), treaty insurance - BYR 1,294.1 billion (55.2%). The level of insurance settlement payments in the total amount of insurance premiums for the last 9 months of 2014 made 43.4% (for the nine months of 2013 - 41.4%).

The total amount of the insurance reserves formed by the insurance companies of the Republic of Belarus as of 01.10.2014 made BYR 6,454.1 billion, equity capital - BYR 11,850.7 billion. The latter increased by BYR 535.4 billion in comparison with the same period of 2013.

XPRIMM: How would you comment the renewal negotiations in Baden-Baden this year?
Andrey T. UNTON: The International Reinsurance Symposium in Baden-Baden held on October 19, 2014 was dedicated to the prospects of the reinsurance market development, identification of the demands of customers of the reinsurance coverage and products that satisfy them. BELARUS Re took an active role in the work of symposium. We had a number of negotiations with business partners such as HANNOVER Re, SWISS Re, TRUST Re, PARTNER Re.

In the course of symposium BELARUS Re reached an agreement about the renewal of the reinsurance programs for the year of 2015, a discussion of perspectives for the conclusion of treaty contracts of retrocession of Belarusian risks took place. With cooperation development in the field of reinsurance in view BELARUS Re also met a number of broker companies.

Taking into account the sanctions in force of the European Union and the USA on the Russian Federation including reinsurance field, BELARUS Re considers the current situation as favorable opportunity for cooperation development with cedents of the Russian Federation.

XPRIMM: In your opinion, in what direction will develop the global reinsurance market?
Andrey T. UNTON: In the international reinsurance market a tendency of the last few years of gradual insurance and reinsurance rate decline, optimization of expenses for reinsurance will persist.

Reinsurers have shown positive results of operation that took a form of low loss level and combined ratio. That factor has even more improved the investment prospects of the companies with a significant growth of the reinsurance capacity as the result. In addition a purchase of reinsurance cover in the alternative markets of the capital through issuing of bonds, diversification in the part of refocusing from original cover of exclusively CAT to more traditional types of insurance get further development.

It is important to note the pressure the international market of reinsurance gets from other capital markets. Therefore long-term partnerships between the reinsurers and their clients, the ability to fit the needs of reinsureds and to offer best methods of their interests protection will be the key to success. The reinsurance companies will have to take efforts to explore new products to meet the demands of their clients or they won't be able to compete with alternative capital markets.