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XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER
No. 126, February 12th, 2009
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INSURANCE PROFILE
  EDITORIAL


Insurance - How necessary is it during the crisis?

In times of crisis, the companies' budgets are, inevitably, reduced ... But which expenses are considered by the companies to be less useful? Most often, the answer to this question is: marketing, training courses ... and, of course, insurance.

The same situation as with companies is also found, naturally, with individual clients. Thus, according to several specialists of the Romanian profile market, the reduction of the insurance costs may be based on the concept that: "If untill now there was no damage, although I have been paying the insurance for several years, it is likely I will not have any damage this year either, when I don't have much money for insurance anyway".

Potential clients, hard to convince

Moreover, besides people who give up their policies, there are also the potential customers that profile companies try to approach in terms of concluding an insurance.

In this case, the situation is even more complicated, because people who are not insured and who have not received any compensation, fiind it quite difficult to understand the need for insurance, especially when incomes don't grow, and they are even reduced.

This perception of customers, both retail and corporate ones, will be reflected to some extent in the volume of insurance premiums this year.

Of course, besides this, regarding the insurance perspective, there is also the objective aspect, which refers to the reduction of the production companies' activity, which will also affect the services business.

The strong reduction of car sales in the whole European Union is a good example, in this regard - Romania being in the same situation. This decrease in sales, according to specialists, will have a significant negative effect on the Romanian insurance market, with the motor insurance segment representing over 60 percent.

The best time to buy an insurance ...

However, specialists believe that giving up this last chapter in times of crisis is not the best approach, as the role of insurance rises during unfavorable times.

The explanation for this statement is that, during such a period, it is harder for the clients to find funds to replace the destroyed property following a damage, in case there is no insurance for it.

Several experts in the field underline, in this case, the role of the insurance broker, who should advice customers that want to reduce their insurance costs to chose alternatives that will not leave them exposed to important risks.

by vlad.panciu@mxp.ro

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MILLENIUM INSURANCE BROKER


WILLIS
POLISH Re

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KINGSPAN
EDITORIAL | POINT OF VIEW | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS
 INTERVIEW

 

Interview with
Constantin TOMA
President
OMNIASIG Vienna Insurance Group

XPRIMM: How do you think the insurance market in Romania will develop in 2009?
Constantin TOMA:
The Romanian insurance market still has a high growth potential and the penetration degree of insurance products in the GDP is still small, about 2%, way below the Western European level. Insurance density per individual in Romania has a value of about 70 EUR, while in Austria, for example, over 2,000 EUR. These elements lead us to believe that the insurance market will keep the line of development slightly upward in 2009, but will not record a spectacular growth.
I would also like to mention that in our market competition is not directed toward increasing each company's services quality separately, but rather is directed to achieving a higher market rate at any sacrifice, which led to very large losses, especially in the motor insurance area. There have been many companies that tried to steal higher market share with lower prices. After three years of acting this way, the effects are seen in recorded losses. After the shareholders have repeatedly announced that they no longer wish to capitalize insurance companies (who have too much capital for the volume of activity that they develop), we have been all aware that solving these problems and improving the industry climate profile can come only from inside the market, through joint effort of all players, by adopting strategies that respond to current economic conditions and interests of our investors.
This financial crisis opened our eyes in a way. We received a global signal on how to behave, to protect and to act in a market. On the other hand, Romanian companies' shareholders are very careful in supporting other companies that are bringing losses and we all woke up facing the truth. If this year the necessary measures are not taken, if we will not apply tariffs on a serious actuarial background, if we will not operate with minimum administrative costs and properly calculated commissions, if we will not properly size organizations, we will continue to make losses, which will be increasingly difficult to cover in this difficult economic context.

XPRIMM: What are your objectives for 2009?
C.T.:
The main objectives that we have in mind this year are increasing the company's profitability, along with keeping current customers. We want to keep our customers on a long term. We also have in mind a decrease in the motor insurance portfolio share and the development of other non-motor industries.

XPRIMM: What do you consider to be the main insurance policies utility in the context of the current global economy?
C.T.:
Insurance policies prove their utility in difficult economic situations as well. I am convinced that, in such a crisis situation, people will realize that there are in each one's life some material goods they need to protect.

XPRIMM: What are the strengths that your company has compared to the competition?
C.T.:
OMNIASIG is an organization that has not made any rebate from a correct tariff policy, a product portfolio developed in line with market needs and demands and permanently preserved the quality standards appropriate to a top international insurance group such as VIENNA Insurance Group. All these elements can also be seen through the evolution results in a permanent increase registered by the company in the recent years.
We always strive to be an extremely serious company and, especially, to stay always on the podium. These targets were always found in our strategy on medium and long term.


by mihai.cracea@mxp.ro

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Constantin TOMA
Constantin TOMA
President
OMNIASIG Vienna Insurance Group

MEDICOVER
EDITORIAL | POINT OF VIEW | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS
 POINT OF VIEW


How deep is the economic crisis?

As always, the officials were surpassed by the events in recognizing that the effects of the economic crisis will be felt in Romania. Without commenting on whether the reasons were related to the political interest of the moment, to the economic ignorance or simply to not caring, I limit myself to observe that an honest analysis of the situation we are in is needed. The government, along BNR, must take bold and professional decisions to limit the effects of the crisis.

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Dragos CABAT

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Dragos CABAT
Dragos CABAT
President
CFA Romania and Managing Partner FINANCIAL VIEW
EDITORIAL | POINT OF VIEW | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS
 TOP PRESS

FIAR Registrations for 2009 are in full swing
Over 130 participants from 21 countries have already registered for FIAR 2009, one of the most expected events in the international markets for insurance-reinsurance and private pensions.
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by oana.necula@mxp.ro, 4.02.2009


46.8% of the underwritings - concentrated in Bucharest
After the first nine months of 2008, about 46.8% (EUR 859 million) of the total gross written premiums, on a national level, have been concluded in Bucharest, according to a study conducted by the INSURANCE Profile editorial staff.
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by vlad.boldijar@mxp.ro, 2.02.2009


INTERAMERICAN gives up the portfolio of general insurance
INTERAMERICAN, the future EUREKO Romania, will not operate on the general insurance segment anymore starting with 1 May 2009 and will focus on the main lines of business. Giving that the property policies, motor insurance, civil liability and Cargo will be sold, the company estimates a reduction in business of about 10% in 2009, up to RON 70-72 million, according to Carmen RADU, Deputy General Director, INTERAMERICAN.
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by andreea.ionete@mxp.ro, 5.02.2009


AON Romania rises with 20% in 2008
AON Romania closed the year 2008 results above those budgeted in the context in which the global economic crisis began to be felt in Romania in the last quarter of last year, according to Karina ROSU, CEO of the insurance and brokerage company.
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by andreea.ionete@mxp.ro, 4.02.2009


Radu VASILESCU and UNITA broke up
After a less than 3 months collaboration, Radu VASILESCU has split from the company UNITA.
"The collaboration ended amicably since 27 January 2009, the decision being taken jointly", UNITA's leadership has stated, exclusively for XPRIMM News.
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by oana.necula@mxp.ro, 2.02.2009


UNIQA invests EUR 45 million in UNITA
Austrian Group UNIQA has made a capital injection amounting EUR 45 million (RON 175 million) into UNITA, the local insurance company taken over in the second half of 2008. So, the capitalization of UNITA has increased with 121% and now amounts to EUR 82 million (RON 320 million), ensuring the company's strong development.
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by andreea.ionete@mxp.ro, 5.02.2009


EUREKO Romania's agenda for 2009
After the completion of the INTERAMERICAN Group's rebranding, EUREKO group proposed for this year to make significant investments to strengthen the brand level and the insurance institution on the market in Romania. Thus, in the middle of this month, a marketing campaign will be launched to define EUREKO's position in Romania.
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by andreea.ionete@mxp.ro, 12.02.2009


The Bucharest motor park rose by 20%
The Bucharest motor park has recorded a value of 600 motor vehicles per 1,000 inhabitants, similar to that of France or Germany. Thus, only in 2008, the capital city fleet registered an increase of 20% to more than 1.2 million vehicles, according to the statistics made by the Administration and Internal Affairs Ministry.
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by mihai.cracea@mxp.ro, 12.02.2009


CLAL Romania increases its capital with EUR 4 million
Romanian subsidiary's shareholders of the Israeli insurance group CLAL plan to increase its capital with EUR 4 million in order to support business development and reorganization.
So, CLAL Romania's capital will increase to EUR 16 million, the last increase, of EUR 4 million also, being operated in the last half of 2008.
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by andreea.ionete@mxp.ro, 2.02.2009

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Casco Ieftin

Safety Broker
EDITORIAL | POINT OF VIEW | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS
 CEE, RUSSIA&CIS


ALLIANZ: Moderate growth follows current slowdown in CEE
In the coming years, GDP growth in CEE will be more moderate. This holds true in particular for those countries with significant domestic imbalances like Latvia or the Ukraine. Additionally, the massive credit expansion seen in recent years in many countries in CEE was to a considerable extent powered by foreign banks.
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by andreea.ionete@mxp.ro, 04.02.2009


STANDARD & POOR's increased the ratings for Re POLISH
STANDARD & POOR's Ratings Services said today that it raised its insurer financial strength and counterparty credit ratings on POLSKIE TOWARZYSTWO REASEKURACJI S.A. (POLISH Re) to 'BBB' from 'BBB-'. At the same time, the ratings were removed from CreditWatch, where they had been placed with positive implications on Sept. 8, 2008.
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by eugen.spivacenco@mxp.ro, 5.02.2009


Results of Ukrainian Insurance Market for the Year 2008
In 2008 Ukrainian Insurance market continued to increase across the board despite of the fact that in the IV quarter the rate has dramatically declined over the same period in 2007.
The League of Insurance Organizations of Ukraine (LIOU) has reviewed the main trends and forecast performance indicators of insurance market in Ukraine in 2008. The forecast is based on the correlation-regression model.
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by eugen.spivacenco@mxp.ro, 6.02.2009


VIG RE exceeds expectations
VIG Re, the VIENNA Insurance Group's own Central and Eastern European reinsurer, has made an important start in its very first year of business.
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by andra.badescu@mxp.ro, 04.02.2009


EUROINS Insurance Group acquired Turkish INTER Sigorta
Bulgarian-based EUROINS Insurance Group (EIG) acquired a 90% stake in the Turkish general insurance company INTER Sigorta for a total consideration of EUR 427 thousand, following an approval from the Turkish Savings Deposit Insurance Fund and Directorate of Insurance at Treasury Undersecretary on January 21, 2009.
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by oleg.doronceanu@mxp.ro, 05.02.2009


The Annual International Conference on Risk Management in Almaty
The Fifth International Conference on Risk Management will be held this year traditionally in Almaty, Kazakhstan, on 15-17th April 2009. The event is organized by EURASIA Insurance Company, one of the leaders on the local insurance market and an active player on the CIS markets.
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All-Russia Conference on Reinsurance has come to its 13th edition
All-Russian Union of Insurers with the support of the business center "Delovoy Format" proudly presents their next conference "Reinsurance in Russia. Guidelines for today and tomorrow" to take place in Moscow, on 24-25 March 2009.
The annual All-Russian reinsurance conference has traditionally become a major social event which brings together Russian reinsures and their foreign colleagues for the 13th time already.
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 FINANCIAL NEWS


BCR: Romania's economy to raise by 1.2% this year
Romania's economy could increase by a mere 1.2 percent in 2009, according to Romanian Commercial Bank (BCR) lender in its Country Report, presented yesterday in a press conference. The difference in economic growth between Romania and the euro-zone will be maintained at some 2.5-3 percentage points. Thus, countries using the European currency will register an average drop in the economy of slightly over one percent.
"Services, trade, and construction, could continue to be the main factors to generate economic growth in 2009," said BCR's Chief Economist, Lucian ANGHEL.
The situation could improve in 2010, for which BCR forecasts a three percent rise in gross domestic product (GDP). Although foreign direct investments (FDI) are expected to decline this year, Romania remains a profitable market for foreign investors, interested in long-term businesses. FDIs are estimated by BCR at EUR9 billion in 2008, 26 percent higher year-on-year, covering almost half of the current account deficit. BCR, Romania's top lender in terms of assets, forecasts an average exchange rate of RON 4.3/EUR1 in 2009, and of RON 4.1/EUR1 in 2010. Moreover, the current account deficit could narrow to 9.4 percent this year and to 8 percent in the coming year.
by standard.ro, 7.02.2009


Romanian bonds have the highest yield in the EU
The yield of bonds issued by the Romanian state reached 12.6 percent, in terms of national currency, the highest rate of return of bonds issued by the governments of the 19-largest countries in the European Union, according to a report by ERSTE Bank.
Hungarian and Bulgarian bonds rank second and third, respectively, with yields of 10.7 percent and 7.2 percent. Prices of Romanian bonds dropped significantly in the past few months, due to the need for liquidity of owners and the deterioration of economic conditions. The bond rate of return varies indirectly proportional to their price. "Yield is an expression of the way investors perceive risk, and Romanian bonds are bearers of the highest interest rates in the region in national currency," the Chief Economist of Romanian Commercial Bank (BCR), Lucian ANGHEL, told Business Standard.
Moreover, investors are cautious about the state budget. "We believe the budget deficit will be five percent of GDP [gross domestic product]. The main problem in 2009 is related to budget revenues, which could be subject to strong pressures," added ANGHEL.
by standard.ro, 7.02.2009


Industry turnover up 5.4 percent in 2008
The turnover in Romania's industry rose 5.4 percent year-on-year in 2008, mainly due to the thermal energy, electricity, gas and water industry and processing industry, which compensated for a decline in the extractive sector, according to the National Institute of Statistics (INS) on Monday. In the electricity field, business rose as much as 19.4 percent. The growth was 4 percent in the processing industry, while turnover in the extraction sector dropped 2.4 percent on 2007.
by NewsIn, 9.02.2009


CINTEZA, NBR: Solvency is relatively high in the banking system
Almost 40% of foreign funding attracted by banks until the end of last year, i.e. over 9.5 billion EUR are due in 2009, Nicolae CINTEZA, Director of the Supervision Department of the NBR (National Bank of Romania), told ZF in an interview. In all, banks have debts worth 24.3 billion EUR with foreign financial institutions. He says talks with banks have revealed that almost 80% of loans attracted from parent banks, which are due in 2009, are "quite likely" to be rolled over until 2010, which means that part of the funding needed by Romania is ensured. CINTEZA has been at the helm of the NBR's Supervision Department for almost two decades now, and is very familiar with the inner workings of the banking system.
by Ziarul Financiar, 9.02.2009

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EDITORIAL | POINT OF VIEW | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS
 EVENTS

FIAR - International Insurance-Reinsurance Forum
May 25th - 29th, 2009
Sinaia, Romania
12th Edition
Organizer: Media XPRIMM
Official web-page: www.fiar.ro


V International Carpathian Insurance Conference
February 16th-19th, 2009
Yaremche, Ukraine
Producer: LIOU
Organizer: BSC PERSPEKTIVA
Media Partener: Revista PRIMM - Asigurari&Pensii
Details: www.cbs.org.ua


All-Russia Conference on Reinsurance
March 24th - 25th, 2009
Moscow, Russia
13th Edition
Organizer: All-Russian Union of Insurers
Co-organizer:Business Center Delovoy FORMAT
Details: www.re-conference.ru


V International Conference on Risk Management
April 15th-17th 2009
Alma-Ata, Kazahstan
Organizer: EURASIA Insurance Company
Media Partener: Revista PRIMM - Asigurari&Pensii
Details: www.irmc.kz

 

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