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XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER
No. 139, September 3rd, 2009
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GenRe
  EDITORIAL



SMEs - a stake for insurers?

The times when insurance companies were struggling for large accounts are now gone, as all specialists consider that the growth potential of this market now lies in retail.
But what are we selling to retail - this is the question?

Household, health, life insurance, maybe sometimes even liabilities policies - the profile companies will answer.

There is, however, a niche with great potential, also identified by the banks - SMEs. Actually, promotional campaigns with which various banking institutions try to attract this segment have invaded the media. If "the fairies" from the banks have smelled this niche, why wouldn't the insurers also take advantage of it?

In Romania there are, at present, over 600,000 small and medium enterprises that fall into the insurers' "Focus on Retail" strategy.

Up to date, only few companies have taken steps to enter on this market, as there are dedicated products in the offers of few companies. But in these economic times, when entrepreneurs want to protect their business as well as possible, insurance for SMEs can be a stake for the profile companies.

And, if we analyze the results of the banking market, it may actually be a winning bet.

by mihaela.circu@mxp.ro

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

 

Interview with Mesut YETISKUL and Radu MANOLIU,
CREDIT EUROPE Asigurari

XPRIMM: What were the results of CREDIT EUROPE Asigurari in the first half of this year that stands under the sign of the crisis?
Mesut YETISKUL:
Compared with the corresponding period of last year, our gross written premiums volume increased by 30%; the highest growth was recorded in the category of persons accidents insurance, whose volume of gross written premiums was about 4 times higher, followed by the corresponding increase of damage and theft of vehicles insurance, which registered a volume almost 3 times higher, and the growth associated to household insurance for individuals and to buildings insurance for legal persons, whose cumulated volume was 45% higher than the one registered at the end of the first half of 2008.
On the other hand, the only decrease, of 45%, was registered in loans insurance; but this negative effect of the crisis, not at all surprising, has not affected significantly the company's results - which were positive, including the ones regarding the evolution of profit.

XPRIMM: Which are the insurance products that CREDIT EUROPE counts on in times of crisis?
Radu MANOLIU:
Noticing the misfortunate direction towards which the lending system is heading, the company management has revised, since last year, the short-term development strategy. Thus, increased level of collaboration with independent brokers, in conjunction with increased competitiveness in the field, has led to a doubling of the share of Motor Hull insurance in the portfolio, compared to the situation in the similar period of the previous year; in fact, this type of insurance has become the main component of the portfolio, with a share of almost 30%, just to the detriment of loans insurance, whose share decreased more than two and a half times, in the same comparative terms, to a level of around 20%.
In the same order of ideas, continuous diversification of the innovative range of products correspondent to the persons accidents class, supported by an appropriate sales policy, resulted in tripling the share of this type of insurance in the portfolio, which reached 22%, compared with the corresponding period of the previous year. Last but not least, the share of property insurance (which includes both household and property insurance, and insurance of buildings and property belonging to legal persons, with all the specific subtypes) remained constant, at a level of around 27% - despite the decline of the real estate market; in fact, this type of insurance continues to be one of our strengths.

XPRIMM: What are the most important projects that CREDIT EUROPE has in progress now? What are the objectives of the company for the next period?
M.Y:
Referring to large projects that we have set for the current year, I am happy to announce that one of them, consisting in activity expansion in Belgium, Germany and Holland, has already passed the phase of approval from the Insurance Supervisory Commission and it is now in the operational implementation phase.
On the other hand, noticing the improvement of the circumstances for the motor third party liability insurance, we have analyzed the possibility of obtaining positive results in this area and we have decided it was time to become active in this regard, too; unlike the first case, for this project we have not started the formal steps yet, but I think there are high chances they will soon be begun.

XPRIMM: What strategy should the Romanian insurers adopt to overcome the difficult period through which the entire market passes?
R.M:
I think that the orientation towards new types of products and / or towards new types of collaboration can significantly increase the chances of recovery or of development of business specific to the Romanian insurers. Moreover, this is the conclusion that emerges from the positive experiences registered by CREDIT EUROPE Asigurari in this regard - both orientations proved to be decisive, in our case, in obtaining the previous mentioned results.

XPRIMM: What is the most important lesson that the Romanian insurance market should learn from this challenging year?
M.Y:
The most important lesson, that of the imperative of organizing business based on profitability criteria, and of lack of major concessions to the actuarial principles, was already learned - that is, in fact, one of the few positive effects of the crisis with which the Romanian sector of general insurance is still confronting.

XPRIMM: Thank you!

by oana.radu@mxp.ro

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Mesut YETISKUL
Mesut YETISKUL,
General Manager
CREDIT EUROPE Asigurari


Radu MANOLIU
Radu MANOLIU,
Deputy General Manager
CREDIT EUROPE Asigurari

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

Only one insurer listed on the Stock Exchange...
ASTRA Asigurari, the largest insurance company with Romanian majoritary capital, could remain, soon, the only profile company in Romania listed on the RASDAQ market, provided that the other three companies whose shares were traded on the Bucharest Stock Exchange are on the verge of being withdrawn.
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by andreea.ionete@mxp.ro, 26.08.2009


VIG - linear evolution in Romania
The Romanian member companies of VIENNA Insurance Group (VIG) recorded, in the first six months of 2009, an increase of underwritings of only 0.6%, in national currency, compared with the similar period of last year. Also, the segment of life insurance has registered an increase of 90.7%, while the underwritings on the non-life decreased by 5%, due to portfolio restructuring.
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by oleg.doronceanu@mxp.ro, 21.08.2009


Underwritings of EUR 59 million for UNIQA in H1/2009
The insurance company UNIQA underwrote, in the first 6 months of the current year, gross premiums of almost EUR 59 million (RON 250 million). Also, in the same period, UNIQA Asigurari has increased 3.7 times the net profit in 1stH/2009, after it started a project to streamline claims. Thus, the company achieved a profit of RON 5.23 million (EUR 1.24 million), according to recent statements of President Ileana HORVATH.
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by oleg.doronceanu@mxp.ro, 20.08.2009


The life portfolio of ARDAF might pass to GENERALI Asigurari
The shareholders of GENERALI Asigurari may approve, at the Shareholders General Meeting scheduled on the 3rd of September, the transfer of the life insurance portfolio of ARDAF to GENERALI. Also, shareholders will discuss approval of the increase of the participation quota in the share capital of PAID - the Insurance Pool against Natural Disasters, from 1% that is EUR 120,000, as established in the Shareholders General Meeting on April 30, 2009, to EUR 250,000.
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by andreea.ionete@mxp.ro, 25.08.2009


GROUPAMA - a 12% decrease in the first half
The French group GROUPAMA, which owns in Romania ASIBAN, BT Asigurari and OTP Garancia, ended the first half of this year with an 11.9% decline of business, to EUR 104 million, on the background of a significant reduction in underwriting activity on the life and health insurance segment.
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by andreea.ionete@mxp.ro, 28.08.2009


CREDIT EUROPE Asigurari takes advantage of the European passport
CREDIT EUROPE Asigurari is already running one of this year's most important projects of the company, namely the expansion of activities in Belgium, Germany and Holland, already approved by the Insurance Supervisory Commission. Also, the insurer intends to enter the Romanian MTPL market in the next period, according to company officials.
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by andreea.ionete@mxp.ro, 31.08.2009


ASIGEST is getting ready for a new start at the end of the crisis
"Those who use this less favorable economic climate to reorganize, to optimize processes, are those who will have the most to gain at the end of the crisis", Antonio SOUVANNASOUCK, Managing Partner, ASIGEST Broker, said for XPRIMM Newsletters.
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by andreea.ionete@mxp.ro, 3.09.2009


Business of RON 163.5 million for ARDAF in first half
ARDAF, the eighth company on the Romanian non-life insurance market, ended the first half of this year with business of RON 163.5 million, according to the report submitted to the Bucharest Stock Exchange. Motor insurance contributed with RON 147.3 million to the total volume of the underwritings, representing 90.3% of the portfolio, out of which Motor Hull insurance brought over RON 51 million, up 15% compared to the first half of 2008, and MTPL insurance - RON 96.2 million, a negative evolution of 38%.
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by andreea.ionete@mxp.ro, 2.09.2009


CLAL Romania: posts RON 2.4 million in first half
CLAL Romania underwrote, in the first six months of 2009, gross premiums which totaled RON 2.4 million, thus recording, compared to H1 2008, when the company underwrote premiums totaling RON 3.3 million, a real decrease in national currency of 31%.
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by vlad.boldijar@mxp.ro, 1.09.2009

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Casco Ieftin

Safety Broker



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


Amsterdam hosts "Claims Management and Processing in Insurance" next week

MARCUS EVANS proudly presents their next conference, the 3rd Annual Conference "Claims Management and Processing in Insurance", to take place in Amsterdam on 7th & 8th September 2009. The event will bring in discussion the means to realize bottom line savings and to effectively combat fraudulent claims. Also, the attendance would learn from Key Practical Case Studies provided by AMB GENERALI, AVIVA, AIG, ZURICH, MUNICH Re and many others.
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by andreea.ionete@mxp.ro, 3.09.2009


IXth INTERNATIONAL YALTA FINANCE FORUM
Between the 14th and the 18th of September 2009, the IXth International Yalta Finance Forum will take place, as traditionally, in Yalta, Ukraine, INTOURIST Hotel. The event is dedicated not only for the insurance market, as it also has the participation of representatives of other financial services - banking, investment businesses, credit unions, pension funds and others. The Organizer is Business Strategy Center "PERSPEKTIVA", with the support and assistance of the League of Insurance Organizations of Ukraine and of the government.
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by oleg.doronceanu@mxp.ro, 3.09.2009


The 5th International Conference "World Views for LIFE INSURANCE in Eastern Europe, CIS and Asia"
17th - 18th November 2009, Hotel Baltschug Kempinski, Moscow, Russia
In November, Moscow will once again host one of the key conferences on life, banc-assurance and asset management in emerging markets.
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by oleg.doronceanu@mxp.ro, 3.09.2009


November Business Meetings in Moscow
On 24-25 November 2009, for the 8th time, Russian capital, Moscow, will be the venue of the November Business Meetings of Reinsurers, organized by All-Russian Insurance Association and "Business Character" Group, with the support of PRIMM - Insurance & Pensions Magazine as Media Partner. The event will be held at Holiday Inn SOKOLNIKI.
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by eugen.spivacenco@mxp.ro, 3.09.2009


UNIQA: Group's written premiums fell by 1.6%
In the first six months of this year, the UNIQA Group's written premiums' volume fell by 1.6%, to EUR 2.95 million, due to the muted demand for unit-linked life insurance and to fewer single premiums. Retained consolidated premiums earned in the first half of 2009 rose by 2.6%, to EUR 2.37 billion.
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by eugen.spivacenco@mxp.ro, 31.08.2009


TRIGLAV has a new President of Management
Matjaz RAKOVEC is the new President of Management of the insurance company TRIGLAV, according to a press release of the Slovenian insurer. After the session of the Supervisory Board, TRIGLAV officials informed about their decision, with an explanation that RAKOVEC was the director of the Ljubljana regional unit until now.
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by eugen.spivacenco@mxp.ro, 28.08.2009


Ukraine: Insurance market in a free fall
Ukrainian insurance companies reported for 1H/2008 a significant decrease of premium revenues to UAH 9.5 billion (EUR 769.5 million), down by 15.74% compared to the same period of 2008.
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by eugen.spivacenco@mxp.ro, 31.08.2009


Hungary: Premiums down by 13% in first half of 2009
Hungarian insurance market revenues fell by 13.3% to HUF 410.1 billion (EUR 1.48 billion) in the first half of 2009, compared to the same period of last year, according to Hungarian Insurers Association.
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by eugen.spivacenco@mxp.ro, 31.08.2009

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


Top 10 most profitable companies in Romania
The Orange mobile phone operator, the state-owned ELECTRICA SA electricity provider, the VODAFONE mobile phone company, the PETROM oil company, the American European MARKETING&ENTERPRISES SA real estate company, the ARCELORMITTAL Galati steel producer, the LAFARGE cement producer, the ROMGAZ natural gas provider, the BAT tobacco company, and the CARPATCEMENT cement company were the most profitable companies in Romania in 2008, according to the www.doingbusiness.ro Web site.
The top 30 companies by net profit earned EUR 3,169 billion last year. ORANGE's profit amounted to RON 1.661 billion (EUR 437.6 million). ELECTRICA's profit was RON 1.220 billion (EUR 331.28 million) worth, including the funds received following the privatization of its largest subsidiary, ELECTRICA Muntenia Sud. VODAFONE's profit amounted to RON 1.128 billion (EUR 306.4 million), while PETROM, Romania's largest company and local oil market leader, posted a net profit RON 1.022 billion (EUR 277.6 million) worth. AMERICAN EUROPEAN Marketing&Enterprises registered a net income of some RON 747.62 million (EUR 203.008 million) last year.
ARCELORMITTAL Galati, the country's largest steel producer, ended 2008 with a net profit of RON 604.87 million (EUR 164.24 million), while ROMGAZ's net income was RON 537.29 million (EUR 145.89 million), and BRITISH American Tobacco (BAT) Romania Trading had a net income of RON 365.38 million (EUR 99.21 million). CARPATCEMENT Holding SA posted a net profit of RON 323.16 million (EUR 87.75 million).
The Romanian economy is expected to drop by at least eight percent this year, according to the latest estimates, as several markets were sharply affected by the economic crisis and the signs of rebound are very slow. Industries such as the construction sector, the auto segment, or the steel industry were among the first victims.
by standard.ro, 2.09.2009


What can Romania do with EUR 1.5 billion
The Romanian state wants to attract between EUR 500 million and EUR 1.5 billion from international capital markets in the second half of this month, meant to cover part of the budget deficit. However, there are several question marks regarding the ability of the authorities to manage an eurobond issue of such magnitude, considering that the EUR 500 million loan contracted by Bucharest City Hall in 2005 has not yet been fully used.
The question is: When we take the money, do we know how to administer this? "As of mid-September, we intend to launch the issue, and hope to decide on two or three brokers early next week, from a list of the ten banks selected. We also initiated the selection of the law firm that will provide legal advice for the issue", said Bogdan DRAGOI, State Secretary in the Ministry of Finance, who was Financial Director of Bucharest City Hall when the EUR 500 million eurobond issue was launched.
Bucharest City Hall has some EUR 200 million left to spend, from the money attracted four months ago, official sources told BUSINESS Standard. The destination of the money, according to these same sources, would be the modernization of the heating network, after most funds were invested in infrastructure. City Hall representatives had not commented by the time the print edition closed. At the end of the first half of 2005, Adriean VIDEANU, General Mayor at the time, and currently Minister of the Economy, announced that City Hall was successful with "the most spectacular bond issue in Central and Eastern Europe in the past 15 years, in terms of structure and volume". However, unlike 2005, Romania is in full financial crisis, investments have been frozen, the number of tax-paying companies is dropping, and the leu has lost against the euro. In this context, what seemed to be a very inexpensive loan is proving to be very costly.
by standard.ro, 2.09.2009


Industry likely to be the first sector to bounce back
The industrial sector is likely to be the first one to bounce back from the economic crisis, according to economic analysts. However, this will depend on how soon Western European economies resume growth, as the local industry is relying on demand from those countries.
By sectors, the automotive, processing, and food industries will have the fastest rate of loss recovery.
Besides industry, agriculture, although less predictable due to its weather dependency, is likely to do well this year, although below the results registered in 2008.
"Industry will be the first sector to rebound, with tempering decline. That is already happening, and I believe that the production decline will amount to 8 percent, from a previous 11 percent", according to BANCA Comerciala Romana (BCR) Chief Economist, Lucian ANGHEL. He added that construction could also resume growth, if major infrastructure work begins.
The Chief Economist of RAIFFEISEN Bank Romania, Ionut DUMITRU, is also betting on industry, which he sees at minus 7 percent by the end of the year. In early 2009, industrial production dropped as much as 12 percent year-on-year. However, it regained ground to -8.9 percent in July.
by standard.ro, 31.08.2009


Stock Exchange posts returns of up to 330% on main titles in six months posts
The Bucharest Stock Exchange today finishes the first six months with growth, with gains on main companies amounting to up to 330 percent between 1 March-31 August, and BIOFARM, CONDMAG, BROKER Cluj, and SIF Moldova are the companies with the highest gains, as the value of their shares more than tripled.
The most important 25 companies listed on the Bucharest Stock Exchange (BVB), which are included in the BET-XT index, gained some 143 percent in the past six months, considering that 15 companies rose by over 100 percent, and only two are in the red (SOCEP, with a 5.3 percent loss and FLAMINGO International, with a 23.4 percent loss).
Brokers said that, in spite of the increases in the past six months, the Stock Exchange is far from recovering the losses registered in 2008, the worst year in BVB's history.
"I did not see any spectacular increases on the Stock Exchange compared to how much they declined. They should increase 20 times to recover what they lost in 2008", said Mihai PISCAN, EFG Eurobank Securities broker. He added that, considering that the financial investment company (SIF) index closed last week at its highest level in 2009, the Stock Exchange may continue to rise.BVB indexes gained between 4.3 percent (BET-NG) and 20.4 percent (BET-FI) in August, and the shares of more than 50 issuers ended the month in the black. However, BVB's evolution was surpassed by the Bulgarian stock exchange, whose SOFIX index gained nearly 30 percent in the same period.
by standard.ro, 31.08.2009


IT companies want to attract employees from their competitors
The limited number of specialists on the local market and the desire of companies to have highly performing employees, especially in the current economic context, are encouraging players to attract employees from their competitors. One of the sectors where this is a common practice is IT where, upon leaving, employees take not only personal skills with them, but also precious information and entire databases, according to recruitment specialists.
The NESS Technologies Romania IT service provider replaced one tenth of its employees this year based on performance criteria. Dragos NICOLAESCU, the company's General Manager, said that, in times of crisis, when costs need to be cut to their minimum, employers do everything they can to maximize competence per employee.
"We used both recruitment companies and our own networking. We attracted [people] from our competitors, although this was not our main criterion, but rather their professional skills, their reputation, dedication, and determination", NICOLAESCU told Business Standard.
According to Florin OCHIANA, Human Resource Operations Manager at the LUGERA&MAKLER recruitment company, limited power of decision and the salary package are the main reasons for which employees decide to change their jobs.
"We currently have 80-90 employees, but now have the possibility of recruiting very good professionals and foregoing people who have proven to be not so good", said Gabriel MARIN, Managing Director of the OMNILOGIC IT company, a major player on the local market.
by standard.ro, 24.08.2009

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

Claims Management and Processing in Insurance
September, 7th-8th, 2009
Amsterdam, The Netherlands
Organizer: Marcus Evans
Media Partner: PRIMM Magazine - Insurance & Pensions
Details: www.marcusevans.com


Les Rendez-Vous de Septembre
September, 4th-10th, 2009
Monte Carlo, Monaco
Organizer: RVS
Media Partner: PRIMM Magazine - Insurance & Pensions
Details: www.rvs-monte-carlo.com


9th International Yalta Finance Forum
September, 14th-18th, 2009
Yalta, Ucraina
Organizer: The League of Insurance Organizations of Ukraine
Media Partner: PRIMM Magazine - Insurance & Pensions
Details: www.cbs.org.ua


11th Insurance and Reinsurance Conference Hydra
September, 17th-19th, 2009
Hydra
Organizer: Hellenic Association of Insurance Companies
Media Partner: PRIMM Magazine - Insurance & Pensions
Details: www.eaee.gr


Health 2009
October 8th & 9th, 2009
Berlin, Germany
Organizer: UNIGLOBAL Research
Media Partner: PRIMM Magazine - Insurance & Pensions
Details: www.uniglobalresearch.eu


31st Baden-Baden Meeting 2009
October 25th-29th, 2009
Baden-Baden, Germany
Details: www.badendirectory.com


5th International Conference "World Views for LIFE INSURANCE in Eastern Europe, CIS and Asia"
November 17th-18th, 2009
Hotel Baltschug Kempinski, Moscow
Organizer: Russian Polis Information Group
Media Partner: PRIMM Magazine - Insurance & Pensions
Details: www.in-sure.ru


November Reinsurance Meetings
November 24th-25th, 2009
Holiday Inn Moscow Sokolniki Hotel
Organizer: All-Russian Insurance Association (ARIA)
Coorganizer: Business Character Group
Media Partner: PRIMM Magazine - Insurance & Pensions
Details: www.nbm-moscow.ru

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XPRIMM Newsletters

THE EDITORIAL STAFF:

President: Sergiu COSTACHE CEO: Adriana PANCIU
Business Development Director: Alexandru D. CIUNCAN

Editor in Chief: Mihaela CIRCU
Scientific Advisor: Daniela GHETU
International Column Coordinator: Andreea IONETE
Senior Editors: Vlad PANCIU, Oleg DORONCEANU
Editors: Vlad BOLDIJAR, Oana RADU-NECULA, Mihai CRACEA, Andreea STATE, Eugen SPIVACENCO
Junior Editor: Marian MARDARE
General Secretary: Lidia POP

Accounts Manager: Georgiana OPREA
IT Department: Octavian GRIGOR, Dorin PALADE, Cosmin ARMASESCU

e-mail:  xprimm@primm.ro

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