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XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER
No. 130, April 9th, 2009
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INSURANCE Profile
  EDITORIAL



Insurance takes the "test of trust"

The world economy is going through one of the most serious financial crisis in recent history... Under the impression of the news journals and of the articles from newspapers, the future looks increasingly grim, and the majority embraces a contagious pessimism...
Few are those who still believe that there is life after the crisis, considering the famous phrase that says: "If America sneezes, the whole world catches a cold", and now when America has, by some, pneumonia, one can imagine, following the logic, the disease the "world" could have.

The Romanian insurance market - affected?

Coming from a global level, to our country level, and more deeply, to the insurance industry in Romania, it is not at all surprising the fact that the profile market here is starting to feel the symptoms of the crisis.
In times of crisis, the budgets of the companies are, inevitably, reduced... But which expenses are considered by companies to be less useful? The answer to this question often is: marketing, training courses and... insurance.

Same situation as with companies is found, of course, in terms of individual clients. Thus, according to several specialists of the Romanian profile market, reducing the insurance costs may be based on the concept that: "If untill now there were no claims, although I have been paying insurance for several years, it is likely I will not have claims this year either, when I don't have much money for insurance, anyway".

Moreover, besides people who give up their policies, there are also the potential clients that profile companies try to approach for buying insurance.

In this case, the situation is even more complicated, because people who are not insured and who have not benefited from any claims find it quite hard to understand the necessity of insurance, especially when revenue doesn't grow, on the contrary...

At present, the key word in insurance is "trust", more specifically, the belief that the promise that you buy will be respected... Therefore, insurers must submit all efforts for this trust, which our clients have granted to the system after sustained efforts of persuasion, not to be lost. This brings us, of course, to the differences arising between the profile companies, the most important being the quality of offered services.
Last but not least, insurers should be aware that a client lost in this period will be a client extremely difficult to regain...

by mihaela.circu@mxp.ro

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BCR Asigurari de Viata

MILLENIUM INSURANCE BROKER


WILLIS
POLISH Re
Credit Europe Asigurari
KINGSPAN
EDITORIAL | POINT OF VIEW | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS
 INTERVIEW

 

Interview with
Mihail TECAU,
President of the Executive Board,
BCR Asigurari

XPRIMM: What were the visible effects of the trigger of the financial crisis on the activity of the company you represent and what do you forsee to be the impact, on medium and long term?
Mihail TECAU:
The financial crisis had a direct impact on revenues from underwritings, in particular due to the volume of gross premiums that were written in leasing companies and in motor insurance, as well as to insurance collateral to banking business.

XPRIMM: What are the main anti-crisis measures that a Romanian insurance company must take in order to face both the effects of the crisis and the increasing competition in the industry?
M. T.:
Offering mainly products with medium and low degree of risk insurance coverage, establishing programs of restricted insurance coverage and targeting especially the retail segment of the market, the concern for keeping the existing clients and expanding the relationships with them are the main anti-crisis measures that should be adopted by insurance companies.

XPRIMM: What was the impact of restricting the credit and leasing activities upon the volume of new-business and how do you appreciate this indicator will evolve in the current context?
M. T.:
Restricting the credit and leasing activity had the biggest impact upon the insurance business, especially on the new-business segment, and this is also as a result of the claims' increase, due to the returning of the financed goods, by the users.
We estimate that, until the end of the year, the Government will take necessary measures to revive the credit/financing business, but the price of motor insurance will increase, and the volume of income from insurance premiums in the leasing activity will be below the level of the previous years.

XPRIMM: From the perspective of insurance premiums, what was the effect of the national currency depreciation upon clients and by what methods have you compensated or do you intend to compensate this impediment?
M. T.:
As most insurance is priced in currency and paid in lei, the depreciation rate influences negatively the ability to pay of the insured.
To compensate this effect, our company is structuring its offer on insurance plans, from the lowest price to the best insurance coverage.

by andreea.ionete@mxp.ro

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Mihail TECAU
Mihail TECAU,
President of the Executive Board,
BCR Asigurari

MEDICOVER
FADATA
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 POINT OF VIEW


A divided world and few solutions

The reunion of the leaders of the most important 20 countries on the planet had a well defined goal: creating an image of unity of the civilized world in front of the global recession. It is exactly this goal that was not reached after the reunion. The different positions regarding the ways to address the crisis have not been reconciled: the U.S. continues to have an aggressive attitude, based on relaxation of monetary and fiscal policies, on the massive injection of liquidity in the financial system and on conditioned support of private companies - and conditions are among the toughest.

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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

Only 9 days left
We remind you that only nine days remain for registration at the 12th Edition of FIAR - International Insurance-Reinsurance Forum from Sinaia.
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by oana.necula@mxp.ro, 9.04.2009


And the winners are...
The GREAT AWARDS, awarded on the occasion of the ninth edition of the Insurance Market Awards Gala, were claimed by three of the most important insurance companies in the country.
OMNIASIG gathered the biggest number of congratulations after winning the Great Award - Insurance Company of the Year. ALLIANZ-TIRIAC was declared Company of the Year - General Insurance, while on the Life Insurance segment, ING Asigurari de Viata proved to be the Company of the Year.
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by oana.necula@mxp.ro, 27.03.2009


FIAR Partners from the Russian reinsurance market
EASTERN Reinsurance Company (VOSTOCHNAYA Perestrahovaya Kompania), from Russia, supports, as Main Partner, the 12th Edition of FIAR - the International Insurance-Reinsurance Forum.
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by oana.necula@mxp.ro, 31.03.2009


In February alone, shareholders have injected EUR 100 million to the capital of the Romanian insurers
In the first two months of the current year, the Romanian insurers have received capital injections, from their shareholders, of over EUR 115 million, almost half of the total capital increase operated in the whole year 2008 (EUR 240 million).
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by andreea.ionete@mxp.ro, 3.04.2009


Slowing growth for non-life insurance
General insurance market posted in 2008 a volume of undewritings of over EUR 1.9 billion, 12% more than the value at the end of 2007. The evolution registered at the underwritings level was almost 20 percentage points below the average growth of 2007. However, the average increase in general insurance was superior to the life insurance increase, as the first increased its market share with a plus of 0.5 percentage points, up to 80.2% share of the total underwritings made on the insurance market.
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by alex.rosca@mxp.ro, 26.03.2009


Life insurance in 2008 - once again, less than 20%
Let's consider a psychological threshold: 20%, the share of life insurance in the total of the market. In 2007, this threshold was exceeded by little by life insurance and it seemed that the trend of growth above the market average of the mentioned class woud consolidate. But last year the growth in European currency of about 11%, with almost one percentage point below the average growth of general insurance, has lead life insurance, once more, below the 20% threshold.
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by alex.rosca@mxp.ro, 27.03.2009


Life mediation market: only 1,75% of the whole industry
According to data reported by 75 companies to the Review INSURANCE Profile, EUR 11.39 million is the value of underwritings in the life insurance segment of the brokerage companies that activate on the profile market, during last year, estimated by the INSURANCE Profile Magazine. The number represents, according to the publication, 1.75% of the total underwritings made on the Romanian brokerage market in the above-mentioned period. Compared to the results recorded for this type of insurance underwritings in 2007, it has been registered a nominal decrease in European currency of over -46%. (Note: in 2007, according to the estimates of INSURANCE Profile, the value of the intermediate premiums on life insurance totalized EUR 21.22 million).
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by vlad.boldijar@mxp.ro, 26.03.2009


OMNIASIG, the most profitable insurance company in 2008
OMNIASIG concluded 2008 with a gross profit of RON 168.59 million (the equivalent of EUR 45.78 million), four and a half times more compared to the value obtained in 2007 (EUR 10.22 million), according to preliminary results communicated by the company.
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by vlad.boldijar@mxp.ro, 3.04.2009


GROUPAMA Asigurari enters for ISC approval this month
The GROUPAMA representatives in Romania will submit the documentation for the approval of GROUPAMA Asigurari - a new entity that will be born from the merger of ASIBAN, BT Asigurari and OTP Garancia - to the Insurance Supervisory Commission this month.
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by andreea.ionete@mxp.ro, 3.04.2009


The VIG profit in Romania grows 13 times, up to EUR 57.5 million
The gross profit achieved in 2008 by the companies members of VIENNA Insurance Group - OMNIASIG, OMNIASIG Life, ASIROM and UNITA (sold in the autumn of last year) - has increased 13 times compared with the level reported a year ago, up to EUR 57.5 mil., the Austrian group announces. Of this amount, EUR 45.8 million represents the profit of OMNIASIG, according to the publication INSURANCE Profile, three and a half times more compared to 2007 (EUR 10.22 million), following the sale of UNITA, in which OMNIASIG had 55% of the shares, to UNIQA, transaction estimated at EUR 190 million.
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by andreea.ionete@mxp.ro, vlad.boldijar@mxp.ro, 2.04.2009


CLAL Romania, sold for half a million euro; OMNIASIG takes over its portfolio
CLAL Insurance has finalized the sale of CLAL Romania to a group of local businessmen, for the sum of EUR 500,000, as the current economic context forced the Israelian group to radically change its announced plans and to give up the development of operations in Romania, after it had invested USD 23 million. According to the transactions' agreement, the portfolio in force will be taken over in the next period by OMNIASIG Vienna Insurance Group, the company representatives announced.
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by andreea.ionete@mxp.ro, 9.04.2009


GENERALI Asigurari - 40% growth on the life segment in 2008
GENERALI Asigurari ended 2008 with a 40% increase of the business on the life insurance segment, with total gross written premiums of RON 85.4 million. The company achieved total underwritings of RON 417.5 million, up 9% compared with 2007.
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by andreea.ionete@mxp.ro, 27.03.2009


AEGON: Romania, the third place in Central and Eastern Europe
"Romania is the third country that we count on in Central and Eastern Europe, after Poland and Hungary, anticipating an important development of the business on the life insurance segment", Gabor KEPECS, General Manager of AEGON Group for Central and Eastern Europe, said, at the press conference occasioned by the launch of AEGON Asigurari de Viata in Romania.
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by oleg.doronceanu@mxp.ro, 1.04.2009


ASTRA-UNIQA insures the TAROM fleet for the third year in a row
The TAROM contract, valid between the 1st of May 2009 and the 30th of April 2010, is attributed for the third consecutive year to the insurer ASTRA-UNIQA, which will collect a premium of approximately USD 3.5 million.
ALLIANZ-TIRIAC and OMNIASIG were the other two companies that bid at the auction, to insure the TAROM fleet, according to sources inside the air operator, quoted by Mediafax.
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by andreea.ionete@mxp.ro, 9.04.2009


GENERALI aims for a 22% increase in 2009
For 2009, GENERALI has budgeted a volume of gross written premiums of RON 510.2 million, which translates in a 22% increase, compared to the 2008 results. Meanwhile, the evolution expected in 2009 for the life insurance segment is of 32.2%, lower than the one recorded the previous year, up to a volume of underwritings a little less than RON 113 million.
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by andreea.ionete@mxp.ro, 31.03.2009


TOP 3 life insurance players account almost 60% market share
The first position on the life insurance market is held by ING Asigurari de Viata. The company recorded a growth rate by 9 percentage points lower than the value of the growth recorded in 2007, but above the market average, increasing its market share by nearly 0.5 percentage points, up to 35.2%.
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by alex.rosca@mxp.ro, 27.03.2009


ALLIANZ-TIRIAC & OMNIASIG cumulate 35% of the non-life insurance market
The structure of the first 10 companies, ranked by the order of underwritings volume, remained unchanged, as the only changes were some changes in the positions in top.
With a nominal increase in EUR of around 2%, ALLIANZ-TIRIAC maintains its market leader position, in the conditions in which it has lost about 1.7 percentage points market share. The company has underwritten more than EUR 347 million, about 27 million more than the company on the second place: OMNIASIG.
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by alex.rosca@mxp.ro, 26.03.2009


The market of the motor brokers
According to estimates made by Specialty Review INSURANCE Profile, during the previous year, the Romanian non-life insurance brokerage market witnessed an increase of 42.30%.
The amount of gross written premiums from this line of business in the analyzed period, underwriten by the brokerage companies operating on the profile market, amounted to over EUR 638 million.
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by vlad.boldijar@mxp.ro, 26.03.2009

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Casco Ieftin

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


The Annual International Conference on Risk Management in Almaty

The Fifth International Conference on Risk Management will be held this year, according to tradition, in Almaty, Kazakhstan, on 15th-17th of 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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by oleg.doronceanu@mxp.ro


25% growth for the insurance in the Republic of Moldova, in 2008
Insurance companies in the Republic of Moldova have registered gross written premiums amounting to EUR 54.4 million in 2008 (calculated at the average exchange rate, according to the Moldavian National Bank), in nominal increase of 24.8% compared to 2007. Meanwhile, they paid claims of EUR 17.6 million, with 24.2% more compared to 2007. Gross profit of insurers represented EUR 11.7 million, an 150% increase, according to data provided by the National Commission of the Financial Market.
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by oleg.doronceanu@mxp.ro, 30.03.2009


Tashkent International Insurance Forum
Tashkent International Insurance Forum will be held in the Uzbek capital on 4-7 June 2009. The four-day event is aimed to discuss priority tasks of developing insurance and reinsurance business, familiarizing with investment opportunities of insurance in the region and assisting in the attraction of national and foreign investments, in the insurance market.
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by eugen.spivacenco@mxp.ro, 7.04.2009


Another successful conference in Moscow
The 13th edition of the Reinsurance Conference in Moscow, an event that has already become traditional for the most important insurance and reinsurance companies in Central and Eastern Europe and CIS states was held this year on the 24th - 25th of March, in Moscow.
The event, supported by PRIMM - Insurance & Pensions Magazine as Media Partner for the last years, brought together over 450 participants, representing 147 companies, out of which 23 from outside Russia and over 23 mass-media agencies.
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by oleg.doronceanu@mxp.ro, 6.04.2009


UNIQA Slovakia tops up premiums
With a premium growth of 17% to roughly EUR 97.1 million, the Slovakian subsidiary UNIQA Pojistovna grew in 2008 at a rate significantly above the Slovakian insurance market (+11%) and much higher than the other top 10 insurance companies in Slovakia, according to preliminary data. With a market share of 4.6%, UNIQA further strenghtened its position on the sixth place among the 22 insurance companies active in Slovakia.
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by marian.mardare@mxp.ro, 2.04.2009


MEDVEDEV appoints LOMAKIN-RUMYANTSEV as head of the Expert Department
Russian President Dmitry MEDVEDEV issued a decree appointing Ilya LOMAKIN-RUMYANTSEV as head of the Russian Presidential Expert Department, the Kremlin press service reported at the end of March.
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by eugen.spivacenco@mxp.ro, 30.03.2009

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 FINANCIAL NEWS


Negotiations end: Romania borrows EUR 20 billion
Romania finalized negotiations with international financial institutions for a foreign loan. The announcement was greeted by lenders, but businesspeople fear the financing package will not be sufficient to unblock lending and help the economy rebound. The country is to borrow some EUR 20 billion, of which more than a half, or EUR 12.95 billion from the International Monetary Fund (IMF). The European Commission will provide a further EUR 5 billion, while EUR 1-1.5 billion will come from the World Bank, and the remainder from other financial institutions.The IMF loan is based on a two-year stand-by agreement, at an interest rate of 3.5 percent. The head of the IMF mission to Romania, Jeffrey FRANKS, said that the interest rate depends on international market references, to which a margin is added, based on the value of the loan.The EC loan will be for five years. Initial funds will arrive in Romania in July, with interest based on market conditions and the size of the tranche. Romania's representative to the IMF, Mihai TANASESCU, estimates that the interest rate for this loan could amount to 2-3 percent. "The interest rate will be set when the EC goes out to collect this money for Romania. When a portion of money is due to be sent [to the debtor country], the EC borrows funds from the market, and the interest rate depends on the market at that time," TANASESCU explained. During negotiations for the financial package, it was decided that Romania will need to comply with some macroeconomic conditions to access the funds. Thus, the budget deficit must narrow to below 3 percent of gross domestic product (GDP) by 2011, according to EC representative Filip KEEREMAN. By EU standards, the country's deficit this year is set to amount to as much as 5.1 percent of GDP. Furthermore, Romania must handle its inflation rate, which must be maintained at the level targeted this year by the National Bank of Romania (BNR), of 3.5 percent +/-1 percentage point. After voicing support for the need for an IMF agreement, businesspeople and bankers now have varying opinions on the impact of the financing package.
by standard.ro, 26.03.2009


BNR Governor: The leu will remain stable this year
"We will see no sharp appreciation or depreciation of the national currency in this period. The exchange rate is stable. There are no sharp appreciations or depreciations. And such jumps would harm the economy", Mugur ISARESCU, Governor of the National Bank of Romania (BNR) said Thursday. The statement was made during a press conference on the loan agreement signed by Romania with the International Monetary Fund (IMF), the European Commission (EC), the World Bank (WB), and other international financial institutions.Moreover, ISARESCU's statement comes in support of other statements, expressed on Wednesday by the Head of the IMF mission in Romania, Jeffrey FRANKS. He said that BNR is not protecting a certain level of the exchange rate, but it could intervene in future to limit the "natural" fluctuations of the national currency throughout the year, and to ensure that inflation returns within the targeted range.
by standard.ro, 6.04.2009


BNR decision leaves more cash for banks
The National Bank of Romania (BNR) has made a first major decision since the country applied for an International Monetary Fund (IMF) loan based on a stand-by agreement. BNR's Board of Directors cut to zero the cash reserve ratio (CRR) imposed on local banks for currency liabilities with residual terms of more than two years.
This means that lenders may keep all money from external loans with maturity of more than two years, and they will no longer be forced to deposit 40 percent of these amounts with the central bank, as was the case before.
The cash reserve ratio of lenders is currently 18 percent for lei liabilities and 40 percent for those in foreign currencies with less than two years maturity, the highest level in the European Union.
BNR Governor Mugur ISARESCU recently said that it would be wise for the central bank to exempt long-term liabilities from CRR calculation. "In this way, we help long-term financing, which will support lending, and we lower the bank's distress over short-term liabilities," he said. The liability of banks includes resources attracted from client deposits or other financing types.
A CRR cut, long-awaited by the market, would be offset by the funds borrowed from IMF and other international lenders. The first installment of the EUR 20 billion loan agreed upon last week is set to arrive in Romania as soon as the agreement is approved by the IMF board in the coming weeks.
The BNR decision is to be enforced as of May 24th - June 23rd, once the IMF funds arrive in the country.
by standard.ro, 1.04.2009


Parent-banks increase injections in their Romanian subsidiaries
The financial Portuguese group MILLENNIUM bcp and the National Bank of Greece capitalized their Romanian subsidiaries with more than 100 million EUR in February, three times the amount in the similar month of the previous year, according to NewsIn.
BANCA Romaneasca, majority owned by the National Bank of Greece with 89.07 percent of the shares, hiked its capital by 43.5 million EUR. MILLENNIUM Bank Romania received a capital inflow of more than 37 million EUR.
A single capital hike was recorded in February 2008 on the Romanian bank market, when MILLENNIUM Bank received 23.89 million EUR.The second month of the year also saw capital injections in ROMSTAL Leasing IFN, which received 16.15 million lei, and in the insurance broker ALLIANZ Direct, which reported an inflow of 788,900 EUR. The total capital injections in Romania's financial market amounted to 192.7 million EUR, out of which the insurance companies received more than half, respectively 98.32 million EUR. Foreigners injected 33.36 million EUR in January in their subsidiaries on the Romanian market, a 50 percent year-on-year drop, data show.
by wall-street.ro, 6.04.2009

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


International Conference on underwriting and reinsurance "Kiev Spring 2009"
May 15th, Rus Hotel, Kiev, Ukraine
Organizer: Business-Garant Consulting Centre
Media Partner: PRIMM - Insurance&Pensions Magazine
Details: www.bizgarant.com


Tashkent International Insurance Forum
June 4-7 2009
INTERCONTINENTAL TASHKENT Hotel, Tashkent, Republic of Uzbekistan
Organizer: SAIPRO
Media Partner: PRIMM - Insurance&Pensions Magazine
Details: www.tiif.uzreport.com


Sopot Summer Insurance and Reinsurance Days 2009
June 15th-17th, 2008
Sopot, Poland
Organizer: RESOURCE
Media Partner: PRIMM Magazine - Insurance&Pensions
Details: www.resource.org.pl

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