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XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER
No. 146, December 10th, 2009
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  EDITORIAL


A step forward...

If for 10 months a year the MTPL policies are blamed by all the people that work in the insurance market, the coming of the cold season brings an exacerbation of discussions on this class and a return to more positive feelings.

This year, however, introducing the bonus-malus sistem was also added to the eternal polemics over growth of premium rates.
Viewed with skepticism by the general mass-media, the system is reflected as the new "apocalypse" for drivers. It is lost out of sight the fact that the implementation of the bonus-malus, from January 1, 2010, will bring benefits for 90% of the insured, in the context in which, according to estimates, only 10% of those who have bought an MTPL policy cause damage.

In this context, a driver who had no accidents in a period of one year may receive a bonus of 10%, and the reduction can even reach 50% of the cost of the policy in over 7 years, in the absence of any road events.

After www.constatulamiabil.ro and www.asigurarealocuintelor.ro, the public information campaign on the concept of insurance, started by Media XPRIMM, launches a new challenge: the first web-site dedicated exclusively to motor insurance. Beyond the purely informational zone, the portal www.asigurareamasinilor.ro aims to help the insured to get informed regarding the changes that await them starting next year.

In addition, the site offers an application that helps the drivers to see in which bonus or malus class they will fit in from January 1, 2010, but also what increase/reduction will their MTPL premium rate will bear.

And because, unfortunately, the insurance does not solve everything in case of accident, www.asigurareamasinilor.ro offers the driver a second original application; so, any person who was involved in a car accident can find out what to do.

We are convinced that the good understanding by the general public of basic concepts of the insurance sector, in general, and of the motor insurance, in particular, will gradually level off the "absolute evil" perception the insurers have upon the latter.

And the Campaign initiated and ran by Media XPRIMM, of which the portal www.asigurareamasinilor.ro is a part, represents a step forward...

by mihaela.circu@mxp.ro

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BCR Asigurari de Viata
MILLENIUM INSURANCE BROKER

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POLISH Re
Credit Europe Asigurari
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 INTERVIEW


Interview with Cristian BALANICA,
General Manager,
PIRAEUS Insurance Broker

XPRIMM: How were the Romanian brokerage market and, thus, your company's results affected by the financial crisis? What are the insurance classes that have suffered the greatest decrease?
Cristian BALANICA:
The financial crisis facing both our economy, and the whole world, has produced an "earthquake" among the auto manufacturers, the local dealers; and the results are not delaying to appear also in terms of significantly reducing the sales volume, compared to the similar period of the previous year. Insurance, as secondary industry, is directly affected by the decrease of this important sector of the economy, so the class which has implicitly suffered most is motor insurance. Much tougher lending conditions represent another one of the reasons. The existing situation, at worldwide level, regarding financing might mean that getting a loan or a leasing has become much more complicated. Thus, many potential car buyers had to postpone their acquisitions they had planned in the budget set for 2009. However, I can say that the activity of PIRAEUS Insurance has not suffered, on a contrary, it grew by 32% compared to the same period of last year.

XPRIMM: How will the brokerage market evolve by year's end in your opinion? But in 2010?
C. B.:
The number of insured will certainly be lower - for most of them, insurance costs will be passed on plan three or four as importance -, so I can say that in real terms there would be a slight decline of the insurance market, at least for 2009 and for early 2010, rather than a stagnation.

XPRIMM: What were the consequences of limiting to 15% the commission for MTPL policies and how did this measure affect profitability of the brokerage activity?
C. B.:
The portfolio structure of PIRAEUS Insurance Reinsurance Broker is not one based on this insurance class, this being complementary to the Motor Hull policy offered to our customers, thus we could not have been affected by such a decision to limit the commission. Moreover, this segment grew by 46% compared to 2008, from RON 2,805 million to RON 4,091 million.

XPRIMM: What is the most severe problem of the profile market, as you see it, for the next period? What are the solutions for the development of the brokerage market in times of crisis?
C. B.:
The main problem of the profile market is, in my opinion, the professionalization of the sector. In this regard, I welcome the establishment of the Institute of Management in Insurance by ISC, that comes in a quite difficult period, but thus contributing to raising the professional level, much needed in the brokerage market. Solutions to develop this segment are numerous and depend on the strategy of each manager, but I can say that the most important one of them is, for PIRAEUS Insurance Broker, the idea of "Financial supermarket". Banks enrich the portfolio of banking product packages, giving customers credits, deposits, cards and insurance policies with a single signature. Depending on the bank or broker, a client can create the ideal product, without resorting to more profile institutions.

XPRIMM: How will the percentage of underwritings by brokers evolve, in the total of the underwritings? (In 2008 it was 27%, and in Q1/2009 - 23%, so a decrease). What share do you estimate for the current year?
C. B.:
In 2009, the situation will look the same. Insurance companies attempt to cut costs - on all lines of business, with their staff and spaces in which they operate -, in order to increase their liquidity, which shows only one direction. The focus will be mainly on the collaboration with brokers, where costs are relatively constant. Between 25% - 30% will mean contribution of insurance brokers in the total underwritings volume.

XPRIMM: What are the insurance classes targeted on medium term by insurance brokers?
C. B.:
There is a certain interdependence, if I may say so, between the forms of insurance that insurance companies and the people that activate in the profile brokerage field want. Property is the "star'' in 2009 and, due to economic situation, the most wanted - not sold - product is retail on this segment.

XPRIMM: How did the crisis influence people's perception about insurance? What insurance classes have development potential for the next period?
C. B.:
Unfortunately, the crisis is not over, even if the market shows small signs of revival; but as for lessons learned, we will not be able to discuss that for another few years. It is the first time when, after many years of "double-digit'' growth, the insurance market must draw back and find new solutions. There are still unexplored niches, there are strategies that must be re-analyzed and that were the most important ones 5-6 years ago. All these things depend on the perspective of each of those working in this branch.

XPRIMM: 2 months ago, the amicable report of road accidents was introduced. What is the role of the broker, as a representative of the client, in this sense, and what has been achieved so far?
C. B.:
Brokerage companies are subject to greater stress than the insurance companies, because the "waves of change" are more acutely felt at their level. Regarding the entry into force of the amicable report, here things can have various interpretations. Thus, a very important information channel is represented by the insurance brokers, especially because they assume the role of direct consultants of the clients. The broker is important, as the customer, before addressing to the police, calls his broker and asks what the steps to be followed are. I think it is in everybody's interest that he is informed as well as possible and provides reliable information on the event he was involved in. There are many stages to go before the amicable report will function perfectly.

XPRIMM: Thank you!

by oleg.doronceanu@mxp.ro

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Cristian BALANICA
Cristian BALANICA,
General Manager,
PIRAEUS Insurance Broker

MEDICOVER
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Insurance market, between official growth and real decrease
Despite the economic crisis, the Romanian insurance market will register a growth of 4-5% in 2009, say officials of the Insurance Supervisory Commission.
According to ISC President Angela TONCESCU, in the first nine months companies have been able to identify solutions of growth, so that the volume of underwritings amounted to RON 6.7 billion, a minor evolution from the previous year, but still remarkable amid the economical decline.
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by oleg.doronceanu@mxp.ro, 08.12.2009


Exclusive: The insurance market at 9 months, now for EUR 99!
Did the insurance market rise or did it fall after the first three quarters of this year? Which are the insurance classes that have grown and which are those that have decreased? Who are the new leaders and what changes occurred in the rankings? You can read all this information in the next issue of the Specialty Review Insurance PROFILE - December 2009.
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by mihaela.circu@mxp.ro, 08.12.2009


The new MTPL rules came into force
The Insurance Supervisory Commission issued the new rules on Mandatory MTPL insurance for damages caused by vehicle accidents, which were published in the Official Journal of Romania, Part I, no. 812, of Friday, November 27.
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by mihai.cracea@mxp.ro, 27.11.2009


In the first nine months, shareholders have injected EUR 345 million in insurance companies
The capitalization of the Romanian insurance market surpassed, after the first nine months of 2009, the amount of EUR 1.1 billion, provided that, in the first three quarters of this year, capital infusions in profile companies amounted to EUR 345.14 million, according to the National Trade Register Office (ONRC) data.
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by andreea.ionete@mxp.ro, 09.12.2009


General insurance - down to EUR 1.3 billion
General insurance fell by about EUR 180 million, to a value of around EUR 1.3 billion. The nominal decrease, in European currency, was -12.25%; noted be the fact that the top 10 companies, cumulated, fell by 2 percentage points above the market average, the degree of concentration of the general insurance market going down to 89.5%.
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by vlad.boldijar@mxp.ro, 09.12.2009


21% less for life insurance
A little over EUR 276 million is the amount of gross written premiums on life insurance, which represents 17.6% of the insurance market. The nominal evolution in European currency was -21%, which means a reduction in life insurance business, with over EUR 74 million less than the amount recorded in late September last year.
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by vlad.boldijar@mxp.ro, 10.12.2009


Bogdan ANDRIESCU, reconfirmed as President of UNSICAR
Following the General Assembly on December 3, Bogdan ANDRIESCU was reconfirmed President of UNSICAR - The National Union of Insurance Brokerage and Consultancy Societies from Romania. Also, the new Management Board is composed of: Antonio SOUVANNASOUCK, Managing Partner, ASIGEST, Ionel DIMA, Vicepresident, AVUS Group, Karina ROSU, CEO, AON Romania, and Gheorghe GRAD, General Manager, SRBA.
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by mihaela.circu@mxp.ro, 04.12.2009


ASTRA Asigurari estimates EUR 5 million from on-line sales
Starting December 2nd, www.astraonline.ro is the address at which clients in Romania, individuals or legal persons, can buy on-line insurance policies issued by ASTRA Asigurari.
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by mihaela.circu@mxp.ro, 03.12.2009


EXCLUSIVE: BCR Viata, the first position on the traditional life insurance segment
BCR Asigurari de Viata stepped on the first position in the traditional life insurance segment, by the underwritings volume criteria, thus the company outrunning ING Asigurari.
Anyway, this was expected, as the company member of the Austrian group VIENNA Insurance was the only one who has realized a steady growth in business this year (in Euro): 33.5% in the first quarter, 16.6% at mid-year, respectively 22.4% after the first nine months of this year.
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by vlad.boldijar@mxp.ro, 27.11.2009


GENERALI PPF buys with RON 1.3 million the withdrawal of minority shareholders of ARDAF
GENERALI PPF, the majority indirect shareholder of ARDAF, will pay RON 1.3 million to the minority shareholders, so that they retire from the company, in order to delist it from the RASDAQ market, according to a release submitted to the Bucharest Stock Exchange.
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by andreea.ionete@mxp.ro, 08.12.2009


RON 9.2 million profit for UNIQA Asigurari, at nine months
The financial results of UNIQA Asigurari, in the first three quarters of this year, have continued their positive evolution, so that the company obtained a net profit of RON 9.2 million, compared with a loss of RON 18.7 million, registered in 3Q/2008.
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by andreea.ionete@mxp.ro, 30.11.2009


AGRAS, delisted from the BSE
The shares of AGRAS Asigurari were withdrawn Friday, December 4, from the trading platform of the Bucharest Stock Exchange, after the operation was approved by the National Securities Commission (NSC).
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by mihaela.circu@mxp.ro, 07.12.2009


Over one third of the risk management budgets will increase
MARSH's latest study shows that top managers of large European companies are most concerned about risks related to customers and to credit access, in the conditions in which they are preparing the coming out of the crisis.
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by mihaela.circu@mxp.ro, 01.12.2009


Road safety - in the forefront of the European Commission
In 2008, 39,000 European citizens lost their lives in road accidents occurred in the Member States of the Union, according to data presented at a conference organized last week by the European Commission. The main focus of this conference was the European Program of Action for Road Safety.
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by mihai.cracea@mxp.ro, 07.12.2009

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Casco Ieftin

Safety Broker


GenRe
FADATA
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The Old/New Year of Reinsurance in Russia
On 21-23 January 2010 REMARK Reinsurance Magazine organizes in the VELES Club (the Vladimir region, Russia) business event 'The Old/New Year of Reinsurance', with the support of PRIMM - Insurance & Pensions Magazine as Media Partner.
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by oleg.doronceanu@mxp.ro, 10.12.2009



Moscow hosts the 6th annual "Life Insurance in Russia and CIS" Conference, in February
Marcus Evans proudly presents the 6th annual "Life Insurance in Russia and CIS" Conference that will take place on the 25th and on the 26th of February 2010, in Moscow, Russia. The event wishes to offer a comprehensive view of the life insurance market potential in Russia and CIS and also to discuss the recent updates and improvement possibilities of tax legislation in life insurance sphere.
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by oleg.doronceanu@mxp.ro, 10.12.2009



Moldova: 6% decrease for the insurance market in 3Q/2009
Insurance companies from the Republic of Moldova underwrote, in the first nine months of this year, MDL 595,5 million (EUR 39,9 million) of gross premiums, down by 6% compared to the same period of last year. On the other hand, insurance claims raised by 43,3%, to MDL 270,9 million (EUR 18,1 million), according to National Commission of Financial Markets (NCFM).
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by oleg.doronceanu@mxp.ro, 08.12.2009



FORTIS leaves Russia
Dutch—based financial group FORTIS has announced recently its decision to leave the Russian insurance market, according to insur-today.ru.
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by andreea.ionete@mxp.ro, 04.12.2009



EUROHOLD Bulgaria sets up leasing subholding
The financial group EUROHOLD Bulgaria has made an in-kind contribution of the shares of its Bulgarian, Romanian and Macedonian leasing units, to the newly set-up BG AUTOLEASE Holding, which will operate under the EUROELASE Group name. It comprises EUROLEASE Auto Bulgaria and the two eponymous businesses in Romania and Macedonia.
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by dnevnik, 08.12.2009



19% decrease for the Ukrainian insurers in 3Q/2009
In the first nine months of the year, the Ukrainian insurance market showed a 18,4% nominal decrease in gross written premiums, compared to the same period of 2008, according to State Commission for Financial Services. The total volume of underwritings amounted to UAH 14.18 billion (EUR 1.3 billion).
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by oleg.doronceanu@mxp.ro, 09.12.2009



ERGO buys VITAL Forsikring's Baltic life insurance operations
German insurer ERGO, a unit of MUNICH Re, announced recently it has bought the life insurance operations of Norwegian insurer VITAL Forsikring in Latvia and Lithuania.
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by oleg.doronceanu@mxp.ro, 09.12.2009

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The crisis is over for agriculture, and industry is next
Romania is slowly recovering from the recession. According to data provided by the National Institute of Statistics (INS), agriculture, industry, financial activities, the real estate sector, and services for companies have emerged from the recession and posted growth in the third quarter, compared to the previous three months, while construction and trade are still in the red.
The situation is even worse in annual terms, with agriculture the only sector that managed to register positive results. On average, gross domestic product (GDP) fell by an annual 7.4 percent in the first nine months of this year. The annual decline was 7.1 percent in the third quarter, and data provided by Eurostat indicates that Romania registered the fifth-sharpest drop in GDP in the European Union, while Poland is the only EU member whose economy is still growing.
While agriculture rose by an annual 2.4 percent in the third quarter, the construction sector registered the sharpest decline, of 17.4 percent, followed by net taxes (-14.9 percent), and trade (-11.3 percent). In monetary terms, GDP amounted to RON 127.78 billion (EUR 30.2 billion) in the third quarter, with the average exchange rate in the July-September 2009 period at RON 4.2247/EUR 1.
by standard.ro, 4.12.2009


There will be no bank bankruptcies in Romania in 2010
There will be no bankruptcies in the Romanian banking system in 2010 even if the commercial banks' degree of financial non-performance has grown, the Director of the Supervision Directorate of the National Bank of Romania (BNR), Nicolae CINTEZA, stated during the EU COFILE seminar organized by ALPHA Bank, the Romanian Banks' Association and BNR.
He said the biggest risk for commercial banks was represented by their bad loans to customers working in the public sector, in the context of the effects of the financial crisis, AGERPRESS informs. One of the problems will be the 150,000 public sector employees with bank loans who will be made redundant and who pose a very high default risk, CINTEZA says.
"Most of the capital requirement resulting from the stress test comes from the depreciation of the collateral brought as a guarantee", the BNR official also explained. Nicoale CINTEZA warned that "the first six months of 2010 would be crucial for the Romanian banking system". He thinks the adequacy of the capital requirements is very good for Romanian banks and that, sensing the danger, the banks had taken measures.
by nineoclock.ro, 10.12.2009


ING improves estimates on GDP contraction in 2009
ING Bank Romania has slightly revised its estimates on the GDP decline in 2009, namely from 6.7 percent to 6.5 percent, and has maintained its prognosis on an economic growth of 1.6 percent in 2010, MEDIAFAX informs.
The inflation rate slowdown surpassed the expectations in 2009 as a consequence of a very good harvest and not as a consequence of the demand contraction, the ING analysts opine. Because of that the inflation rate will be low in Q1 of 2010 but the risks will grow in the second half of next year as well as in 2011.
The lessening of the contraction in Q3 compared to the one registered the quarter before and the improvement of the prognoses strengthen the opinion that the economic activities registered in the last quarter of the year could be positive. That represents a positive factor, especially for 2010, the ING notes.
The agriculture had a positive contribution although this sector's performances were very good in 2008 too. In Q3 of 2008 the sector registered a growth of 34.8 percent. The growth stood at 2.4 percent in the same period of 2009, while ING was expecting a contraction of 15 percent in the agricultural sector. This development explains the foodstuff prices' drop and could lead to a positive contribution from agriculture in Q4 too, as well as to low foodstuff price until June-July 2010, the report adds. ING also anticipates a positive contribution of the industrial sector in Q4, with a growth of 5 percent, as well as marginal improvements in other sectors.
They claim that in order to back the recovery in 2010 the economy needs the continuation of the monetary policy relaxation measures and the stimulation of the internal demand after the lessening of the net exports' contribution.
by nineoclock.ro, 7.12.2009


Dacian CIOLOS: Eastern Europe can revitalize the Common Agricultural Policy
The designated European Commissioner for agriculture and rural development, Dacian CIOLOS, declared, in an interview for MEDIAFAX, that the European East can contribute to the revitalization of the Common Agricultural Policy (CAP), and he will work in the interest of the European Union, remaining Romanian "in spirit."
CIOLOS says that he will use the spirit of conciliation, the opening to dialogue in order to look for "essences" in the national interest of the states members of the Union, essences which are the substance underlying the construction of the common European values. Asked which is the method that he will use as European Commissioner, Dacian CIOLOS said that the position of commissioner, beyond the management of a team and of an administrative department, and the collegial decision based on an assumed political programme, means the ability to stimulate ideas in reforming a domain which is vital for the European Union and which must take into account the needs of the farmers, users and taxpayers and reflect these ideas in policy instruments, that would translate most pragmatically and efficiently the European principle of the "unity in diversity." These ideas, transposed in policies, must be negotiated by the commissioner with the European Parliament and with the Council of Ministers of Agriculture from the European Union, in search of the compromise likely to build this unity in diversity. After all these, the Commission is that which is responsible also for monitoring the enforcement of the decisions made at his proposal by the Council and Parliament. CIOLOS also declared that he would take action for the benefit of the European Union, as a person further concerned about the way in which the eastern problems of the EU may better integrate with the European policies, with the European interest.
After so many years of North-South "ideological" confrontation in the successive reforms of the common agricultural policy, some "fresh blood" from the European East will hopefully revive this policy essential in the European construction.
by nineoclock.ro, 3.12.2009

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


6th Annual Conference - Life Insurance in Russia and CIS
25-26 February 2010
Moscow, Russia
Organizer: Marcus Evans
Media Partner: XPRIMM Insurance and Pensions
Official web-page: www.marcusevans.com


The Old/New Year of Reinsurance
21-23 January 2010
VELES Club, Vladimir, Russia
Organizer: REMARK Reinsurance Magazine
Media Partner: XPRIMM Insurance and Pensions
Official web-page: www.remark-magazine.ru


Russian Insurance Summit 2010
20-23 May 2010
VELES Hotel, Vladimir, Russia
Organizer: All-Russian Insurance Association
Media Partner: XPRIMM Insurance and Pensions
Official web-page: ins-conference.org


FIAR - International Insurance-Reinsurance Forum
24-28 May 2010
Sinaia, Romania
13th Edition
Organizer: Media XPRIMM
Official web-page: www.fiar.ro

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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
General Secretary: Lidia POP

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

e-mail:  xprimm@primm.ro

PUBLISHED BY: Media XPRIMM


Reproduction or use without permission of editorial or graphic content, in any manner, is prohibited. The Editorial Staff is not responsible for the truthfulness or the accuracy of the presented data. The Editorial Staff has the right to present the data in it's own manner. In what concerns the use, in any manner, of the information contained in this e-mail, Romanian laws apply.

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