Autumn means it's harvesting time in vineyards and orchards and the moment when a cycle ends. For other trades, this season is the time for a fresh start ... For reinsurers autumn is, par excellence, the time to prepare ... the next "crop" of contracts. Monte Carlo and Baden Baden are the traditional autumn "hot spots" in this business, when the field is set for the next renewal season by meeting with the current or potential clients and evaluating the results of the existing reinsurance arrangements or assessing the future business opportunities, reinsurance professionals. In short, it's the time to ask the essential questions regarding the insurance markets' evolution and the time to get the right answers.
The recent floods that have struck Romania and that led to multiple debates regarding household insurance can be considered a "prologue" for this October's most important event dedicated to catastrophic risks. The 13th edition of ICAR - The International CAtastrophic Risks Forum takes place next month and even from its first editions, it has focused on the necessity of developing a household insurance system in Romania, a country with such high exposure to earthquakes, floods, landslides and other risks.
How much time do you need to find, gather and review an insurer's
history over the last five years? If the insurer you are interested in
is doing business in Romania, than the right answer should be ... no more
than five minutes! The answer the same if you're interested in the
entire market's evolution, regardless of the specific indicators you
need to know. How so? It is enough to pay a short visit to the newest
and most flexible insurance database available in the Central and
Eastern Europe: InsuranceProfile Interactive
Heavy rains have washed the territory of Central and Eastern Europe this summer causing massive floods that resulted in what Swiss Re called "the second most expensive freshwater flood event on record". In short, economic losses of almost USD 18 billion added-on to the pain caused by the 22 lives claimed by the waters.
Although the hot summer days still seduce us into spending some time on the beach, a brief look at the calendar shows that the holiday time is almost over. Thus, it is the right time to ask ourselves what's new on the business ground. But beyond the usual seasonal concerns, a question is uppermost in everyone's mind: where are the growth reservoirs able to feed the future development of the portfolios, especially now, when the financial markets' volatility leaves a very small space for growth in the mature markets?
After an atypical start, dominated by storms, rain and floods, the 2013 summer finally entered in its own right and the sun shines all over Europe: it is again vacation time!
The Romanian insurance business totaled Gross Written Premiums of nearly half a billion EUR during the first quarter of this year. In the past 5 years, for the period under review the market value exceeded EUR 652 million in 2009 while in 2011 companies totaled EUR 492 million, the lowest value of the local market over the past 5 years.
Following press releases stream on the results of the European insurance groups in 1Q2013, I have noticed, among other similarities, the idea that the quiet winter of 2012-2013, showing no significant weather related events, contributed to a better financial result of the companies. Well, in the half year interim reports, probably this idea will miss, as the recent European floods may reverse the trend.
The title above is not a figure of speech. It refers to the Romanian insurance market, the sole market in CEE region which provides, starting these days, a complete history of its insurance market evolution for the last five year in an interactive, fully customizable, quarterly updated data base: Interactive Insurance Profile (www.insuranceprofile.ro), a Media XPRIMM brand.
In the years before the crisis, the CEE countries have built a strong reputation in what the insurance business was concerned. They were clearly and without any doubt recognized as a growing reservoir of the European insurance industry. How much of this reputation has survived to the five years of economic hardship? Should one expect an equivalent delay in reaching the region's potential or maybe the changes determined by the crisis were deeper, totally changing the course of evolution in the region?
After five years of crisis, the CEE insurance market managed to get in 2012 back to the 2008 level of gross written premiums. This is the first conclusion drawn from the 2012 figures that we have gathered for the forthcoming issue of XPRIMM Insurance Report - CEE, SEE & CIS. For a region whose markets were booming at the crisis' onset, this seemingly positive news hides in fact a painful reality: 5 years of delay on the development road. What if ... the crisis had not existed?
A few days after the L'Aquila earthquake four years anniversary, it is maybe the right time to bring into question the CAT risks insurance issue. Although since the 6th of April, 2009 dramatic moment no other European catastrophic event produced such an impressive result, the peril is still out there and the European countries with a high CAT risk exposure should be prepared. With this in mind, a natural question arises: are we really prepared to face the human and financial losses of a great catastrophic event? Or maybe, hardly challenged by the financial turmoil which has shaken Europe in the latest years, we are taking advantage of the relative respite in terms of natural disasters to ignore the problem?
A new financial supervisory authority is under construction in Romania. In the CIS countries, an interstate insurers' union was created with the main purpose of improving the Eurasian Economic Community's insurance markets coherence. New insurance laws are on their way to enforcement in the countries of the ex-Yugoslavian space. Across the entire CEE region sustained efforts are made to find legislative solutions to keep under control the moral claims phenomenon. And all these are only some facts picked up from today's news. The number of changes in preparation is much higher. In this context, what can be said about the future of the industry?
In the emerging insurance markets of the CEE and CIS regions, motor insurance is not only the main non-life business line, but almost without exception, the main component of the entire insurance portfolio. Moreover, besides this regional characteristic, motor insurance remains, because of its large addressability and contribution to the cash flow, a "must have" item for any non-life insurance undertaker. Therefore, analyzing the motor insurance business' status and perspectives may be instrumental for any decision regarding the entrance on a new insurance market.
There are only three days to go until the starting date of the International Insurance Forum 2013 in Istanbul. Focusing on the motor insurance issues, the event will offer to its participants the opportunity of being the first readers of a new editorial premiere: the XPRIMM MOTOR INSURANCE REPORT, containing the most relevant information regarding the motor insurance business of 30 emerging markets from the CEE, RUSSIA&CIS and SEE regions.
Life insurers could see in Valentine's Day a good occasion for speaking about protecting your loved ones and their future financial stability. But we have chosen to use this opportunity for speaking about a "love - hate" relationship: the one established between motor insurers and their customers.
Optimistic or not, all analysts agree that 2013 will be - again - a challenging year. The macroeconomic environment remains volatile, still affected by the potential impact of the sovereign debt defaults and recession-driven difficulties. Low interest rates will further affect the financial results of insurers. Moreover, they will need to recalibrate their systems and operations in response to the new regulations. Altogether, the best case scenario shows a year of hard work and continuous change.
Far be it from us to propose you a cynical discussion about the financial evaluation of the human life. However we choose to consider this matter ... life is priceless. Yet, when it comes to insurance, there are certain situations when assessing a life's value is instrumental. What is the right price to pay for a car accident victim?
XPRIMM News has also arrived at its last issue for 2012. After 12 months of ups and downs, of volatility but also of good signs of recovery, our hope here, in the editorial offices of xprimm.com is that, among the pleasant memories of 2012 you will also put the consistent news stream flowing to you from the 32 countries of the Central and South-Eastern Europe and the CIS regions.
In this era of global financial crisis, the pressure put on the insurers, whether it is coming from shareholders or they are driven by higher costs and falling sales, is set to rapidly change priorities and dilute good intentions in terms of tracking rapid gains at the expense of healthy gradual developments. And to better understand this phenomenon all we need to do is look at how long-term planning works for each and every one of us.