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XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER
No. 132, May 7th, 2009
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  EDITORIAL



How far away are we from a reform of the medical field?

Romania seems to be closer and closer to a health reform. After nearly a decade of discussions, the current executive seems willing to take a series of measures that could lead to a much desired revival of the private health insurance.

Introducing the co-payment, defining the basic package, redirecting a part of the contribution, all these are measures that have been expected for years by the profile market, but will they produce the expected effects?

Thus, the co-payment, about which the Health Minister says it will be enforced until July and then applied starting this autumn, might prove to be a very unpopular measure, especially in the current economic context.
The Ministry could try to "sweeten the pill" by introducing a formal co-payment, of a low value, of EUR 2-3 for instance, without a significant influence on the financing of the health system.

Meanwhile, insurers believe that the healthcare system needs a "forced" reform, in order to allow the access of profile companies to large masses of people.

And the solution would be to introduce the so-called Pillar II of health - complementary insurance, obtained from the re-directing of 2% of the contribution to private companies.
The current executive has therefore the chance to remain in history, not just by managing a crisis of large proportions, but also by taking credit for the first large structural reform of the health system.

A decision should be taken as quickly as possible, especially that the CNAS budget is free falling ...
But we must not forget that it took 10 years to reform the pensions' system, and only a few days to brake it...

by mihaela.circu@mxp.ro

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BCR Asigurari de Viata

MILLENIUM INSURANCE BROKER


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

 

Interview with
Marie KOVAROVA,
President and CEO
GENERALI Asigurari

XPRIMM: In your opinion, what will be the consequences of the financial crisis on the Romanian insurance market in 2009?
Marie KOVAROVA:
To be honest, I prefer to start my answer with the positive aspects of the financial crisis on the Romanian insurance market in 2009, because there are some very important messages to be mentioned.
First of all, the crisis will cause increased pressure from the shareholders on the insurance companies, in order to grow profit, considering the fact that they will no longer be able to inject capital, as they have done so far, to cover the losses. It is, therefore, expected that the insurers subscribe risks in a more careful manner, one of the consequences being the increase of the costs which the high risk insured have to pay. Second of all, the crisis will be beneficial for the auto insurance market, leading to the stop of the prices war, ruled by the "Clients at all costs" slogan.
Obviously, I have to also mention the risks for the Romanian insurance market, in 2009.
At a general level, I am thinking firstly about two very important issues: living standards and population confidence in financial instruments. Speaking about living standards, Romanians will have to face the difficulty of obtaining financial support for their personal and professional projects. Also, they will probably manage more carefully their daily expenses and they will also delay taking a decision about personal and professional investments. Considering the general decrease of confidence in insurance products, their attitude is understandable if we have in mind the failure of the financial corporations at the end of 2008.
In a more particular plan, there are certain local signs that show that some specific insurance categories will be affected. We only have to look at the drop in car sales, which will definitely affect everybody to a smaller or greater extent.
Generally speaking, the smaller insurance companies will probably face some problems, not having the financial support of international groups or of strong investors. This is definitely not the situation for GENERALI Asigurari, which benefits from great support from GENERALI PPF Holding and which has been prepared to face difficult situations caused by the financial crisis, thanks to the prudent approach of the management in underwriting and to the focus on increasing profitability.

XPRIMM: What type of insurance do you believe holds the greatest potential in the near future?
M. K.:
GENERALI Asigurari will focus in 2009 on life insurance, non-motor insurance, non-life for retail and non-life corporate insurance. In our opinion, these are the segments with the greatest growth potential.

XPRIMM: Which are the main measures that an insurance company must adopt in order to be prepared for the upcoming period?
M. K.:
A healthy business approach in insurance requires a prudent underwriting process and concerns for profitability, in the detriment of the market share. I am sure that every player in the Romanian insurance market has already made an analysis of the organization's assets, but also of its weak points.

XPRIMM: Are there visible reactions from the clients due to the financial crisis? Do they have problems paying or are they cancelling the policies?
M. K.:
If we look at the preliminary results for 2008 and for January 2009, we haven't noticed so far this kind of problems. But we definitely expect to face them in the near future.

XPRIMM: Do you plan to further develop your relationship with the insurance brokers or do you plan to increase the number of agents?
M. K.:
We are proud to have a strong professional relationship with our brokers' network and our intention is to make all efforts in order to consolidate it.
Concerning our agents, starting this year we will implement a special program which aims to encourage and reward the efficiency and the free initiative of our agents, but also to extend our team. I want to underline the fact that our expectations from our agents are very high. They represent the GENERALI Asigurari values in the relationship with our customers and their attitude and behavior have to rise up to our quality standards. I think that our efforts towards preparing a highly professional and motivated team will give us a strong advantage on the market.

XPRIMM: What do you believe to be the most significant problem for the Romanian insurance market?
M. K.:
First of all, the insurance products still have a low penetration in Romania. The main cause is a general lack of financial education of the population. And the main concerning effect is a lacking in financial protection. Especially in a crisis period, it is highly recommended not to give up the financial protection.
Also, the motor segment is taking a significantly large part of all premiums, 60% (data for Q3/2008), while in Czech Republic, for instance, motor products represent 29% of the market. But this is not the main problem. The real problem is that the motor market is immature and engaged in a war of low prices. Also, it has difficulties in implementing modern instruments, such as the deductibility.

XPRIMM: Are there visible effects of the crisis in the activity of your company?
M. K.:
We definitely see the effects on the motor segment, caused by the decrease in new cars sales. But we have already prepared a coherent strategy, in order to decrease the possible impact. Also, we expect a lower increase in the life sector, compared to 2008.

XPRIMM: Which are your company's main objectives for this year?
M. K.:
GENERALI Asigurari will target increase in the gross written premiums on all product categories, focusing on life insurance, non-motor insurance, non-life for retail and non-life corporate insurance. Also, the prudent underwriting process for motor insurance will continue, as well as the improvement of the claims rate and the improvement of the quality of services offered to our clients. Last, but not least, the company is reconfirming its intentions to obtain a more balanced portfolio between the corporate and the retail clients and to grow its presence and visibility throughout the country.

XPRIMM: What do you believe to be the impact of the activity decrease in the credit and leasing sectors on the insurance market?
M. K.:
Fortunately, GENERALI PPF Holding and also GENERALI Group have a safe investment strategy, hence we are not exposed to toxic actives.

by andreea.ionete@mxp.ro

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Marie KOVAROVA
Marie KOVAROVA,
President and CEO
GENERALI Asigurari

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

Romania: target for MACIF
The French insurance group MACIF intends to expand in Romania, and also in other countries from Central and Eastern Europe, the company officials stated, exclusively for XPRIMM Newsletters.
The French show interest in acquiring a functional company, with a stable, thus operational, distribution structure.
Click here to read more!
by vlad.panciu@mxp.ro, 24.04.2009


The ASTRA-UNIQA logo remains unchanged
ASTRA-UNIQA has decided not to give up the association with the name UNIQA. Thus, the largest company with majoritary Romanian capital will keep the current logo.
The decision was taken in the Extraordinary General Meeting of Shareholders, held on the 22nd of April this year, when the proposal for adopting a new logo - ASTRA Asigurari - was rejected.
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by andreea.ionete@mxp.ro, 23.04.2009


KOVAROVA: The GENERALI PPF Holding companies do not merge
GENERALI PPF Holding does not plan, in the near future, the merger of the three companies currently held on the Romanian insurance market. "All the local entities of the Group will function independently, under a local Group supervision. The companies will maintain separate ways and strategies of business development", Marie KOVAROVA, President and CEO, GENERALI Asigurari, responsible for the actions of the GENERALI PPF Group in Romania, said for XPRIMM Newsletters.
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by andreea.ionete@mxp.ro, 30.04.2009


15% of Romanians want to give up the MTPL Insurance
According to a study conducted by UNIQA Asigurari, 15% of the Romanians want to give up their motor third part liability policies. The main reason given by them, in proportion of over 50%, is the high insurance rates.
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by mihai.cracea@mxp.ro, 6.05.2009


GROUPAMA submitted the project of setting up the new company for ISC approval
The French group GROUPAMA, which owns in Romania the insurers ASIBAN, BT Asigurari and OTP Garancia, intends to begin the rebranding process of the companies, in the summer of this year, and to launch the new brand GROUPAMA Asigurari in the second half of the year.
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by oleg.doronceanu@mxp.ro, 5.05.2009


UNIQA Asigurari aims for Top 5 with simple, customer-oriented solutions
UNIQA Asigurari will soon begin its rebranding campaign, that will mark both the change of image of the company and the adopting of the UNIQA corporate culture and group values, summarized in: quality, respect, decency, unity and flexibility.
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by andreea.ionete@mxp.ro, 6.05.2009


ARDAF switches to a dual management system
The insurance company ARDAF, part of GENERALI PPF Group, will adopt a dual management system, according to the modifications in the constitutive act of the company, adopted by the Shareholders' General Assembly that took place last week.
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by mihaela.circu@mxp.ro, 4.05.2009


Theodor ALEXANDRESCU: "Health system needs a forced reform"
The co-payment system for medical services will be introduced starting the 1st of July. This is the deadline set by Ion BAZAC, Minister of Health, regarding one of the most important aspects of the healthcare reform.
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by mihaela.circu@mxp.ro, 29.04.2009


GENERALI will participate in PAID with 1% of its share capital
GENERALI Asigurari decided to participate in the Pool of Insurance against Natural Disasters (PAID) with 1% of its share capital.
The decision was adopted in the Extraordinary General Meeting of Shareholders, that has also decided the company's share capital increase, with RON 9.45 million, up to RON 129.45 million, by cash contribution of the shareholders.
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by oleg.doronceanu@mxp.ro, 5.05.2009


The volume of premiums ceded in reinsurance is continuing its decline in 2008, too
The annual increase of the volume of reinsurance premiums ceded by Romanian insurers continued to reduce in 2008, reaching 5.7% (in euro it was recorded a nominal decrease of 4.2%), from 7.97% in 2007, compared with the 49% evolution registered in 2006. The share of premiums ceded in reinsurance, in the total of the underwritings, was reduced from 24.04% to about 20%.
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by andreea.ionete@mxp.ro, 24.04.2009


UNIQA raises its participation in AGRAS to 95.9%
The Austrian group UNIQA has increased its participation in AGRAS Asigurari to 95.9%, after it bought, through UNIQA Asigurari, 1.23 million shares of the company, representing 3.59% of the share capital. Taking into account that now it holds more than 95% of the AGRAS shares, UNIQA could delist the company from the RASDAQ market, based on the capital market legislation.
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by andreea.ionete@mxp.ro, 24.04.2009


GENERALI Asigurari - RON 18 million capital increase
GENERALI Asigurari will increase its share capital by RON 18.1 million, up to RON 138.1 million, the amount needed to meet the legal requirements regarding the solvency margins for the life segment. This increase will be submitted for approval to the Extraordinary General Meeting of Shareholders of GENERALI Asigurari, which will take place on April the 30th.
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by andreea.ionete@mxp.ro, 28.04.2009


Simon FOREMAN is leaving AON Benfield
Simon FOREMAN will leave the position of Director of AON BENFIELD, in order to continue his career along with another reinsurance brokerage company. He has not yet disclosed the name of the company in whose team he would enter, but he promised to come back with more details.
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by oana.necula@mxp.ro, 29.04.2009

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Casco Ieftin

Safety Broker

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


"Kiev Spring 2009"
The international Conference on underwriting and reinsurance, "Kiev Spring 2009", will be held in Hotel "RUS", on May 15, in Kiev, Ukraine. The event is organized by BUSINESS-GARANT Consulting Centre, with the official support of the League of Insurance Organizations of Ukraine.
PRIMM Insurance & Pensions Magazine supports this event as Media Partner.
Click here to read more!
by eugen.spivacenco@mxp.ro, 7.05.2009


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 the prioritary tasks of developing insurance and reinsurance business, of familiarizing with investment opportunities of insurance in the region and of assisting in attracting national and foreign investors, for the insurance market.
Click here to read more!
by eugen.spivacenco@mxp.ro, 7.05.2009


SWISS Re is closing its Moscow office
SWISS Re announced the closing of its office in Moscow on May 12. The reinsurer took this decision in order to put all efforts on its core business, to strengthen its capital and to optimize the organizational structure. The company said that this change would not affect existing contracts of the SWISS Re clients in Moscow.
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eugen.spivacenco@mxp.ro, 7.05.2009


A taugh year for the biggest Slovenian insurer
The biggest Slovenian insurance company ZAVAROVALNICA TRIGLAV (ZT) announced a 95% drop of their net profit for 2008, to EUR 3 million, as compared with 2007 when net profit amounted to EUR 51 million.
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by eugen.spivacenco@mxp.ro, 7.05.2009


Croatian insurance market - a growing trend
Croatian insurance companies recorded a combined premium income of EUR 348.7 million in the first quarter of this year, as compared with EUR 340.5 million in the respective period of last year, the Croatian Financial Services Supervision Agency said.
In 2008, Croatian insurers posted a combined premium income of EUR 1.31 billion, up from EUR 1.23 billion in 2007.
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by eugen.spivacenco@mxp.ro, 7.05.2009


Azerbaijan insurance market is slowing down
Azerbaijan insurers had gross written premiums amounting to EUR 40.9 million in Q1/2009, down by 4.17% as compared to the same period in 2007, when underwritings reached EUR 42.7 million. Also, the amount of paid claims went up 32.35%, from EUR 7.43 million in Q1/2008 to EUR 9.84 million in Q1/2009, which significantly reduces the economical efficiency of the Azerbaijan insurance market.
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by eugen.spivacenco@mxp.ro, 28.04.2009

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


BVB gains 70% in a single month
The Bucharest Stock Exchange (BVB) brought investors returns of up to 71.7 percent in April, in the case of financial investment companies (SIF), with the BET-FI index, which registers the evolution of the five SIFs, surging nearly 50 percent since the beginning of the year. This was the second consecutive month in which BVB's main indexes registered the highest increases in Europe.
BET, the index of the 10 most-liquid shares on BVB, gained 28.7 percent in the past four weeks, and it was equaled on the list of top European increases only by SOFIX, the main index of the Bulgarian capital market. As of tomorrow, companies listed on the local stock exchange will begin presenting financial results registered in the first quarter, and brokers expect the growth pace to slow in the coming weeks. "I expect to witness a slowing in the growth pace in mid-May, possibly some slight corrections, followed by stabilizing in the coming months", said the Head of Equities Markets of ING Bank Romania, Florin ILIE. Banks registered far more moderate appreciations in April, compared to the SIFs, considering that the shares of BRD-SocGen and ERSTE Bank rose 9.7 percent and, respectively, 5.2 percent.
Banca TRANSILVANIA shares had the best evolution in this sector, with a 17.2 percent rise. The lender was also one of the first listed companies which presented its Q1 financial results, with a profit slightly above 1 mil. RON, because of the high provisions set by the bank. "Financial results were below expectations. Revenues were based on financial operations which are not sustainable in the long-run, and provisions were about 50 percent above expectations," ILIE added. The official said that there was a slight chance that investors would react strongly to the reports of the financial results of listed companies. A strong reaction is expected only in isolated cases, where Q1 data will by far exceed expectations.
by standard.ro, 4.05.2009


Banks promote loans to attract clients
Bankers are introducing promotional offers for mortgages and consumer loans, a sign that they want to boost lending, after several months of partial blockage on this segment.
Promotions are being offered by major market players, such as Banca TRANSILVANIA and RAIFFEISEN Bank, and by small banks, such as MILLENNIUM Bank and MARFIN Bank. Analysts said that the decline in revenues is forcing banks to promote lending.
"When banks are not granting loans, the profit is dropping. Considering there is no demand for loans, lenders must cut interest rates. If these cost reductions are insufficient, we will see new cuts in interest rates in the near future", said Nicolae-Alexandru CHIDESCIUC, Senior Economist of ING Bank Romania.
Banca TRANSILVANIA is offering an eight percent fixed annual interest until the 1st of January 2011, after which the interest will be EURIBOR 6M plus an eight percent margin. The maximum loan value is EUR 250,000, while the minimum mortgage down payment is 15 percent. The bank imposes an indebtedness degree of 60 percent of the applicant's income, and the loan is granted for up to 30 years.
MILLENNIUM Bank offers mortgages with a 30 year maturity, and the interest is EURIBOR 3M plus an eight percent margin on euro and ROBOR 3M plus a 10 percent margin for national currency credits. The loan amounts to 70 percent of the value of the acquired house but no more than EUR 300,000.
by standard.ro, 27.04.2009


The value of the RON when Romania adopts the euro
Romania could enter the Exchange Rate Mechanism (ERM-2), a two-year period prior to the adoption of the euro, projected for 2012, at an exchange rate of RON 3.9, according to the average estimated by 31 analysts, but values put forward vary between RON 3-5.
Specialists say that Romania will officially adopt the euro in 2015, in line with the target of the authorities, according to a Reuters survey, quoted by the MEDIAFAX news agency.
Romania must reduce its budget deficit and inflation rate, and stabilize the exchange rate in order to overcome the most difficult obstacles prior to entering the euro zone.
ERM-2 allows the national currency to fluctuate +/- 15 percent against the euro for a period of two years. The level of the exchange rate when Romania adopts the euro will determine the share of the country's economy in the European Union, which means that a strong RON would be desirable. On the other hand, a sharp appreciation will make the economy more vulnerable to deficits. In case of the average estimate of 3.9 RON /1EUR in 2012, made by REUTERS, the conversion rate can reach a low of 2.8 RON and a high of 5.15 RON after the two years of ERM-2. The minimum estimate, of 3 RON, means a conversion rate of 2.17 RON in 2015 in case of constant appreciation, while the high of 5 RON means a maximum exchange rate of 6.61 RON /1 EUR in case of constant depreciation.
by standard.ro, 29.04.2009


Mutual funds paid their administrators EUR 5 million in 2008
The 19 investment administration companies (SAI) posted total revenues worth some RON 19 million (over EUR 5 billion) from the management of the 53 mutual funds on the market, according to annual reports and data provided by SAIs. Administration fees make up most of the revenues and represent two percent of the value of net assets at the end of 2008, of RON 940 million (EUR 225 million).
RAIFFEISEN Asset Management (RAM) gained most from administration activities, according to available data, followed by BCR AM, which has lower revenues because most of the assets it administers are in monetary and bond funds, with lower fees. GLOBINVEST, EFG Mutual Funds and BT AM are also front runners.
The relatively low level of administration fees reflects the yet incipient stage of the mutual fund market, according to administrators. The assets of the funds barely reach 0.2 percent of gross domestic product (GDP).
by standard.ro, 30.04.2009


The price of one-bedroom apartments in Bucharest fell EUR 3,000 in one month
The price of an older one-bedroom apartment dropped EUR 3,000 in Bucharest in April, down to EUR 79,000, according to an analysis by the imobiliare.ro website in six of the country's main cities.
Bucharest is followed by Iasi, where the price of a one-bedroom apartment fell to EUR 50,000 from EUR 52,500 in April. Constanta and Brasov rank third, both with a 2,000 EUR decline. Next on the list is Timisoara, with a EUR 1,500 drop in the price of a one-bedroom apartment, while the lowest decline was registered in Cluj-Napoca, of only EUR 150.
The national downward trend in prices is supported by reports of the National Union of Public Notaries in Romania, which indicate that the number of transactions with housing units and land fell 37 percent in the first three months, compared to the first quarter of 2008, to 78,321.
by standard.ro, 7.05.2009

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EDITORIAL | 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


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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FIAR

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