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XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER
No. 170, December 16th, 2010
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EDITORIAL


The Motor Hull race!

Although the claims had a continuos growth, as long as the volume of business had a positive dynamic, the effects of commercial underwriting upon the motor segment were less visible at market level.

Now that investors have bought just about everything there was to be bought, we ran out of market targets, but nevertheless, we are still witnessing a battle for market share. In fact, is it more of a struggle for liquidities?

Although Motor Hull claims had a worrying increase, insurers continue to focus on this segment. Under the pressure of diminishing incomes and of losing market share, we are witnessing a real battle: reduction of tariffs for all customers or rates drops, segmented on social or risk classes.

The race for market share in the early 2000s was motivated by rising the investors' interest, that were targeting company after company.

Now, the stake for commercial underwriting seems to be the "resurrection" of Motor Hull insurance.

Is this the only way?

alex.rosca@mxp.ro

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Interview with Angela TONCESCU
President of the Supervisory Insurance Commission

XPRIMM: We can speak now of the "adulthood" of this field and, why not, of the whole industry. What would the most important benchmarks of these years be?
Angela TONCESCU:
It is very difficult to answer this question briefly, because so many important things have happened, that have contributed to today's market. Among the main steps I should mention, firstly, the training and development of a competitive market as a result of investments made by many internationally renowned insurance and insurance brokerage companies. This would had not happened if, at the same time, a specific insurance legislation, appropriate to economic realities, had not been created or if a supervisory authority had not been created and consolidated. As it was natural, to regulate and to reinforce the supervisory process were actions done in several stages, taking into account the fact that the Romanian market had to absorb all these changes in a very short time, compared to traditional markets in other countries.
Firstly there were Law No. 47/1991 and OSAAR, as insurance supervisory entity, that created the conditions for shaping and strengthening the competitive market in the first post-December 1989 decade.
The accelerated development of the market, insurers taking higher riks, increased claims ratio – all these required the necessity to strengthen the financial capacity of insurance companies, but also to strengthen the supervisory capacity of this market. Therefore, in the late 90s, the transition to a new round of major legislative changes, as well as extending the attributions and competencies of the supervisory body became necessary.
This is how Law No. 32/2000 and the supervisory authority today, the Insurance Supervisory Commission, have emerged. More detailed and more appropriate prudential requirements regarding the insurance activity have been introduced, and I mean, for example, capital requirements, solvency requirements, liquidity, reserves, assets and more. Existing insurers and brokers have gone through a re-authorisation process, thus being eliminated those companies that could not meet the new requirements. In the perspective of EU accession, the Romanian legislation was further amended and completed, to fully correspond with European directives.
All these modifications that took place over time, the development of new products by insurers, but also the increasing role and importance of insurance brokers had resulted in the continuous development of the insurance activity, reflected in annual growth rates often higher than those recorded by other sectors of the national economy.
Insurance Supervisory Commission has extended the collaboration, internally and internationally, especially with European bodies, thus being more actively involved in ellaborating specific insurance legislation, applicable in the European Union.

XPRIMM: How was the insurance market affected by the current economic climate?
A.T.:
In terms of quantity, we already know that the insurance market has felt the downward trends from other markets, such as, for example, the motor sales market or the bank loans market, but also the rising unemployment, lower disposable income of the population and its pessimistic expectations regarding financial security, so I will not go into details.
This situation is quite different in terms of quality, since in the past two years, major projects for the development of insurance market and to increase the protection of policyholders' interests have been implemented. I am referring to the introduction of the amicable report, the establishment of the Insurance Management Institute, organization and support of numerous professional training seminars for insurance companies’ specialists, on the implementation of the future Solvency II concept.
Also, in the series of measures taken by ISC for the benefit of insurance consumers, one can also count the implementation of the bonus-malus system, the MTPL insurance electronic issuing, regulating the method of solving complaints and monitoring compliance of insurers and brokers to the obligation to inform the consumers.
Regulating the professional qualification process for those involved in insurance distribution, improving the quality of CEDAM data on claims paid through MTPL, as well as many activities of public information through seminars and information leaflets are also other measures beneficial for policyholders, insurers and insurance brokers, at the same time.
Other prominent benchmarks of 2010 are also the start of sales of mandatory household insurance against natural disasters, as well as the fact that, for the first time, insurers and ISC have joined forces to launch a campaign of social responsibility regarding insurance benefits. The campaign has also occasioned a gesture of humanity towards those affected by flooding, consisting of the rehabilitation of kindergartens-schools and the afforestation of areas prone to landslides.
Regarding the supervisory and control process, since 2010, ISC has a new approach, which starts, primarily, from the analysis of how the business of insurers is run, the way of establishing their objectives, as well as the ways of reaching them and monitoring the performances. Also, objective examinations of risk management and of internal control system have become major targets of the surveillance process.

XPRIMM: What do you think are the main causes that led to the positive evolution on life insurance segment, in 2010?
A.T.:
Indeed, the nine months figures show that the volume of written premiums from life insurance grew by about 3% compared to the previous year. The positive trend is due to the 18% increase of unit-linked insurance, insurance class that represents 38% of all life insurance underwritings. Also, the total surrenders volume is maintaining its downtrend, marking a 10% decline compared to the same period in 2009.
I think that policyholders better understand that life insurance can also offer, in addition to taking over specific risks, the possibility of long-term savings, and due to the diversification of financial instruments included in the available investment plans, they could obtain better returns than with other savings instruments. I also think that policyholders have begun to realize that it is not in their best interest to surrender policies before maturity, despite the uncertainty of the surrounding economic climate.
Insurance Supervisory Commission, UNSAR, life insurance and capital market specialists, with the very important help of the media, held a campaign to educate policyholders, in the spirit of keeping a life insurance policy, showing its benefits and the disadvantages of surrendering before it reaches maturity.
I am convinced that, in time, consumers will be more informed about the insurance products they buy and will better understand their benefits, the more so as the Insurance Supervisory Commission imposed, by rules, certain obligations to inform customers before closing the contract and throughout its validity. I hope the media will give a helping hand to policyholders and persons interested in buying insurance and will provide information on their legal right to receive a minimum set of information.
Thus, according to regulations implemented by ISC Orders and No.23/2009 and No.11/2010, insurance companies and brokers are required to provide potential customers and policyholders a range of information about the company and, most importantly, about the insurance contract. The information should be clear and accurate, on paper or on another durable support, via one or more documents, and is to be submitted to potential customers or policyholders in a way that confirms that they have knowledge of the content.
By Order No.11/2010, ISC also provides other obligations for life insurance. Thus, before concluding the contract, the insurer is required to do an analysis of the client's financial needs, based on which, subsequently, he is to be offered a financial solution, to draw a risk profile of the client if the offered product is unit-linked or index-linked, as well as to give to the client a projection that describes the detailed evolution of the contract.
Because we pay great attention to the consumers’ need for correct information, the way these rules are respected is an important part of the ISC control during the on-site inspections.

XPRIMM: After an over 6 years effort of the ISC, of the Romanian insurance industry and of the authorities, this year, the first mandatory household insurance policy was issued. What is the importance of this moment for the profile market?
A.T.:
I think it is very important that the activity of underwriting of mandatory household insurance has begun, as floods and other natural disasters do not wait for the system to be perfect to manifest. We have all seen the devastating effects of floods this year and, given that they occurred with much greater frequency over the last five years compared with earlier periods, it is expected that in the near future we will have to deal with events of such magnitude or even greater.
Even if mandatory insurance is controversial as a concept – a proof being the fact that it took us almost a decade to get to this stage -, it is the only viable solution for Romania to finance the potential damage to housing, caused by natural disasters. This is because, in the case of our country, there is an imbalance between the great risks we are exposed to and the low coverage in voluntary household insurance, imbalance doubled by significant budget constraints.
As with any project that starts up, especially if it addresses a very large number of consumers, it is understood to cause fear, reluctance or even suspicion. Therefore, I consider it very important for representatives of the insurance market, of the state authorities and not only to explain to the population that this insurance is not a new tax, but it is intended to compensate them for the damages suffered by their homes as a direct or indirect consequence of the manifestation of the three insured catastrophe risks.
Since the mandatory form of the insurance is a minimum protection tool in case of disaster, with premium rates set at acceptable levels, maybe this activity will not be an important business for the insurance market. However, the application of the mandatory insurance system may be another step in educating people on what insurance protection is, thereby creating the conditions for increasing voluntary insurance underwriting activity.

XPRIMM: What new trends will put their mark on the insurance market development in 2011, after another year of crisis, dominated by restructuring and rethinking of strategies?
A.T.:
Under the circumstances in which the insurance market is closely connected with other markets and with business development in other sectors, it is very difficult to make a forecast close to reality. If the socio-economic context does not change significantly in the right direction, we expect the market to evolve in the same parameters as this year or to remain at the same level. From this perspective, if social and economic situation does not improve, insurers will have the quite difficult task to maintain a balance between financial capacity and priorities of consumers, on one hand, and the need to conclude insurance contracts at actuarially established rates that would enable them subsequently to pay their assumed obligations, on the other side.
Surely, the Insurance Supervisory Commission will do everthing that the legal framework allows in order to support market development and will be flexible in finding optimal solutions to specific problems, as we have done so far.
Another important milestone of 2011 is that insurers and the Insurance Supervisory Commission, together, must continue preparations for the smooth implementation of the future solvency regime, Solvency II, knowing that it will be much more complex than at present, since it takes into account numerous quantitative and qualitative aspects of the activity carried out by an insurer.

XPRIMM: Although the insurance market in Romania is far from having no more major problems, the deadline for implementation of Solvency II is also rapidly approaching. After impact studies already done in our country, do you think that the insurance market is ready or can be prepared in time for this moment?
A.T.:
Allow me to disagree: the insurance market remained stable and has no major problems, even in this period, when we are talking about a severe economic crisis. Regarding preparations for Solvency II, I can say that in recent weeks, the Insurance Supervisory Commission actuaries have made great efforts to verify, analyze and aggregate the high volume of data received from Romanian insurers for the fifth quantitative impact study, QIS5. This study is conducted simultaneously in Europe and is considered by the European Commission as the true test to validate the measures of implementation and of calibration of Solvency II.
We have already started to send aggregated data to CEIOPS and we are close to finalizing the QIS5 Country Report, so we will be able to submitt it to CEIOPS in the near future. However, we will be able to make public the conclusions of the QIS5 Report for Romania only after the QIS5 Report is finished at European level and after its official presentation, scheduled to take place in late April 2011.
Participation in QIS5 exercise will allow us an even more accurate assessment of the impact of the future solvency regime upon Romanian authorized insurers. The previous exercise, respectively QIS4, showed that the impact on the balance sheet of assets of most insurance companies in Romania will not be a major one. Also, even if the solvency capital requirements are expected to increase, especially for general insurance business, the number of companies that would be forced to raise capital to meet these requirements is not significant.
ISC has made and will make great efforts to inform and prepare the insurers for the future solvency regime, having organized since 2007 numerous technical seminars on this topic, with ISC participation, but also with the participation of specialists from supervisory authorities of other states, closely involved in ellaborating the specific legislation at European level.

XPRIMM: What is your message for the Romanian insurance market?
A.T.:
I believe that representatives of the industry should learn from the lessons of the economic crisis, namely that they should get more actively involved in educating people about the usefulness of insurance in everyone’s lives, they should offer better quality services, especially in the claims payment stage, they should strengthen people's confidence in insurance services and, last but not least, they should make more efforts for the development of other business lines with high growth potential.

XPRIMM: Thank you!

by andreea.state@mxp.ro

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Angela TONCESCU
Angela TONCESCU President of the Supervisory Insurance Commission

Credit Europe Asigurari
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IMD2 is aiming for an equitable unique market for insurance brokers and for increased protection of consumers
"The insurance industry is a very important issue for the EU, the more so since it provides jobs for about 2 million citizens of the Member States", has emphasized Sharon BOWLES, Member of the European Parliament, President of the Economic and Monetary Affairs Committee of the European Parliament, in the opening Session of the Public Hearing on the new Insurance Mediation Directive, which took place in Brussels, on December the 10th, 2010.
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by daniela.ghetu@mxp.ro, 13.12.2010



The average increase felt by the insured for MTPL tarrifs in 2009 is 5%; in 2011, tarrifs will decrease
This year's 9 months figures for mandatory MTPL insurance show the fact that the average written premium per contract was only 5% higher than the value from the same period a year earlier, a growth that has been eroded by inflation. "This is, basically, the average growth felt by the insured, even if the increases estimated at the end of last year made reference to much higher values", said the President of the Insurance Supervisory Commission, Angela TONCESCU, in a press release.
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by andreea.ionete@mxp.ro, 03.12.2010



Marius BULUGEA: At the end of the voluntary household policy contract, houseowners must also buy mandatory insurance!
Houseowners who have already completed voluntary insurance which includes the three risks mentioned in the PAD policy (floods, landslides, earthquake) must also buy mandatory household insurance, at the end of the contract for the voluntary one, stated Marius BULUGEA, General Manager of PAID, in the radio show "Ora de Risc" ("Risk Hour"), broadcast at RFI on the 14th of December 2010. Speaking about the law recently enforced by the President of Romania, by which the obligation to buy a PAD policy is eliminated for those which have already underwritten the voluntary policy, the quoted official stressed that "this refers to voluntary policies that have already been concluded, and according to procedures previously published by the Insurance Supervisory Commission (ISC), at the end of the contract for the voluntary policy, houseowners must also buy mandatory insurance".
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by oleg.doronceanu@mxp.ro, 15.12.2010



The decrease of Motor Hull underwritings is pulling down the MTPL price in 2011, too
The significant decrease in underwritings of insurance companies on the Motor Hull segment over the past two years influences the companies policies in terms of MTPL sales, by diminishing the price of this insurance, said Sorin GRECEANU, General Director, Street Victims Protection Fund (FPVS), during the radio show "Ora de Risc" ("Risk Hour"), broadcast on RFI, on the 7th of December, 2010.
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by oleg.doronceanu@mxp.ro, 08.12.2010



VIZINTEANU: The share of life insurance will increase, but it will not exceed the threshold of 30%
The share of life insurance in total market, whose maximum was so far of 26%, and that decreased to 17% in 2009, will grow in the next period, although it is unlikely to pass the threshold of 30%, according to Florina VIZINTEANU, President of the Board, BCR Asigurari de Viata.
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by andreea.ionete@mxp.ro, 02.12.2010



METLIFE's global force will develop the company's portfolio in Romania
"Through the acquisition of ALICO by METLIFE, the customers in Romania will benefit of the global force of a life insurance leader and of the consultancy of local specialists. This will give them confidence to maintain and develop their policies portfolio with our company", stated, in an interview for XPRIMM Newsletters, Theodor ALEXANDRESCU, General Manager, ALICO Asigurari.
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by andreea.ionete@mxp.ro, 08.12.2010



The electronic issuing did not totally eliminate MTPL fraud
"The electronic underwriting did not eliminate the problem of fraud, two ways of action being noticed, in this regard, in the present", stated Radu MUSTATEA, President of the Directorate, ASTRA Asigurari, during the Conference "MTPL - obeying an obligation or personal protection", organized on the 9th of December 2010, by the Romanian Bureau of Motor Insurers, with the support of the Insurance Supervisory Commission.
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by mihai.cracea@mxp.ro, 10.12.2010



Travel insurance fell by 10%
In the first nine months of 2010, according to INSURANCE Profile, insurers have underwritten on this segment premiums worth EUR 7.6 million, 10% less than in 3Q/2009. Leader on this segment is GENERALI Asigurari that, with the taking over of the RAI Asigurari portfolio, holds a market share of 33%. ASTRA can be found on the second position, with EUR 1.1 million gross written premiums, and CITY Insurance, a company whose business depends on travel insurance at a rate of 7.3%, was ranked the third.
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by vlad.boldijar@mxp.ro, 02.12.2010



Romania, a promising market for German insurer GOTHAER
The German insurer GOTHAER intends on expanding in Eastern Europe, on the regional markets with growth potential, Romania being among these, although the company doesn't have specific plans in this regard for the moment, said the newspaper Financial Times Deutschland.
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by andreea.ionete@mxp.ro, 06.12.2010



ASTRA is selling its stake in GENERALI and is investing in three real estate companies
ASTRA Asigurari shareholders have decided, in the Extraordinary General Meeting of Shareholders, held on the 29th of November, 2010, the sale of the shares representing 16.03% of the share capital of GENERALI Romania, with a total value of RON 20.75 million. Also, shareholders have approved the participation of ASTRA Asigurari in the establishing of three companies that will be active on the real estate market, according to the report on EGMS decisions, remitted to the Bucharest Stock Exchange.
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by andreea.ionete@mxp.ro, 03.12.2010



MEDICOVER has a new leader
Starting December the 1st, Catalina BALAN is the new General Manager and Member of the Managing Board of MEDICOVER Romania, one of the most important medical providers on the profile market. She will be replacing Marina OTELEA, that will remain within the company as Administrator.
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by andreea.ionete@mxp.ro, 03.12.2010



Boris SCHNEIDER, awarded with the Golden Order of Honour of the Republic of Austria
The General Manager of ASIROM, Dr. Boris SCHNEIDER, was awarded, on the 2nd of December 2010, with the Golden Order of Honour, one of the most important awards given by the Austrian state. The medal was given in festive circumstances, during a reception held on the 2nd of December at the Bucharest residence of His Excellency, Michael SCHWARZINGER, Ambassador of Austria in Romania.
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by oana.radu@mxp.ro, 03.12.2010



Brokers feel the decline on voluntary insurance classes
Even in an year of crisis, the brokerage market has benefited from the fact that Romanians began to realize the importance of the consultancy that an insurance broker offers and what the savings that can be made with its help are. However, the effects of the difficult economic environment were felt especially on the voluntary insurance classes.
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by mihai.cracea@mxp.ro, 07.12.2010



SAFETY Broker rose by 71%, making it to the TOP 10 of the profile companies
SAFETY Broker's 71% increase, up to EUR 10 million, in the first nine months, placed the insurance brokerage company on the seventh position in the top of the profile companies.
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by andreea.ionete@mxp.ro, 02.12.2010



ASIGEST will bet on optimizing internal processes and on increased competitiveness
"The impact of the financial crisis on the insurance market was minor, compared to how the Romanian economy in general was affected, especially due to a high adapting capacity, reflected by finding new resources and solutions for maintaining existing customers, but also by the conquest of new niches", stated Antonio SOUVANNASOUCK, Managing Partner, ASIGEST Broker. Also, opportunities permanently exist on the insurance market, even now, during the crisis. "By increasing competitiveness, new niches for development, new products and new services to be offered on the market will be found. ASIGEST will try to develop on all these plans, with a greater emphasis on optimizing internal processes and on increased competitiveness", said the leader of the brokerage company.
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by andreea.ionete@mxp.ro, 15.12.2010



Cerasela NERGHES: In 2011, the brokerage market will leave behind the experience of the crisis
ASTOP Broker de Asigurare ended the first three quarters of this year with a nominal increase in EUR of 65%, compared to 3Q/2009, registering a premiums volume of RON 16.3 million (EUR 3.9 million). "I think confidence in our own strength was the fuel that helped us achieve such a "beautiful" increase of cashed premiums, the implementation of our own MTPL issuing program (xGate), the territorial development, the increase of the number of collaborators, team building, all these confirming once more that ASTOP is an important member of the brokerage community in the Western area of the country", told us Cerasela NERGHES, General Manager, ASTOP Broker de Asigurare.
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by andreea.ionete@mxp.ro, vlad.boldijar@mxp.ro, 06.12.2010



ING launches Net Promoter to assess customer loyalty
ING Asigurari de Viata launched, on the 6th of December 2010, the implementation of a permanent system of feedback from customers from life insurance and pensions - Net Promoter. Romania is the first country in the region after Poland, the pilot country, where ING Group is implementing Net Promoter Score (NPS). Net Promoter Score, obtained after each customer's interaction with the company, is an indicator of customer loyalty and of intent to purchase ING's insurance and pensions products and services. For a company, the value (NPS) is based on the likelihood that a consumer recommends a product or service of the company to family, friends or colleagues.
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by andreea.ionete@mxp.ro, 06.12.2010



MEDIHELP: Private medical insurance will become a common thing by 2015
By 2015, private health insurance will replace subscription-type healthcare products of various medical clinics, according to the declarations made by the President of the health insurance broker MEDIHELP International, made during a private meeting of the businessmen community in Bucharest.
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by andreea.ionete@mxp.ro, 07.12.2010

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60% of the Russian insurers might end their activity in the next two years
Over 300 companies out of the 600 that are currently active on the profile market in Russia might end their activity in the next two years, according to the President of the Insurance Supervisory Authority, Alexandr KOVALI.
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by oleg.doronceanu@mxp.ro, 06.12.2010



TRIGLAV is strengthening its presence in Albania, by buying the majority stake of ALBSIG
The end of last week had scheduled the signing of the agreement regarding the acquisition of the Albanian insurance company ALBSIG by the Slovenian insurance group TRIGLAV. So far, TRIGLAV held 9.9 percent of the ALBSIG shares, but "this figure will be increased to at least 50% in the next period", according to Slovenian publication FINANCE.
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by vlad.boldijar@mxp.ro, 14.12.2010



Is AEGON expanding on the life insurance market in Ukraine?
The Dutch insurer AEGON plans to enter the insurance market in Ukraine by acquiring the majority stake of local society NADYA, announced company representatives of the investment company ARCA Capital, which represents the interests of NADYA.
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by mihai.cracea@mxp.ro, 13.12.2010



Leaders from Asia and Eastern Europe will gather at Tashkent Insurance Forum
The fourth edition of the International Forum in Tashkent, Uzbekistan, one of the most important profile events in Central Asia, will be held during April 14th-17th, 2011, organizers estimating a total of 300 participants from Asia, CIS countries, as well as from Central and Eastern Europe. Traditionally, for the third consecutive year, PRIMM Insurance & Pensions Magazine supports the forum, as Media Partner.
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by oleg.doronceanu@mxp.ro, 13.12.2010

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FINANCIAL NEWS


Romania's annual inflation tempers slightly in November, to 7.73%, statistics show
The annual rate of inflation reached 7.73 percent in November, as prices for nonfood products rose 9.75 percent, tariffs for services grew 6.13 percent and prices for food stuff added 6.01%, according to the National Statistics Institute (INS).
Compared to the previous month, consumer prices advanced 0.52 percent in November, as prices for food products soared 0.88 percent, tariffs for services inched 0.20 percent and nonfood stuff increased 0.38 percent.
In October, the annual rate of inflation rallied to 7.88 percent as the monthly rate of inflation stood at 0.55 percent.
In 2010, the consumer basket in Romania, which is used to calculate inflation, features food products with a weight of 37.39 percent, non-food stuff with 44.72 percent and services with 17.89 percent.
The central lender raised the inflation prognosis for the end of 2010, from 7.8 to 8.2 percent, according to BNR's Governor, Mugur ISARESCU.
In 2009, BNR missed the inflation target for the third time in a row.
by newsin.ro, 13.12.2010


Businesses in Romania's industry grow for the eleventh month in a row in October, by 8.3% y/y
Turnover in Romania's industry hiked by 8.3 percent in October from the same month of the previous year, indicating the eleventh consecutive month of increase, but eased 4.7 percent from September, according to the country's statistics body INS.
Businesses in the processing industry advanced 8.9 percent in October from the same month of 2009, while those in the extractive industry dropped 5.5 percent.
On the large industrial groups, the turnover in the intermediary goods industry climbed by 16.5 percent, in the capital goods industry by 13.2 percent and in the long-term goods industry by 5 percent. Decreases were recorded in the power industry, by 7 percent, as well as in the current use goods industry, by 1.2 percent from October 2009.
Compared to September, businesses in Romania's industry diminished by 4.7 percent in October, following a 5 percent decrease in the processing industry and a 5.2 percent decline in the extractive industry.
After the first ten months, the turnover in Romania's industry soared by 10.5 percent from the same period last year, following an 11.4 percent hike in the processing industry, which compensated the 7.1 percent fall in the extractive one.
www.NewsIn.ro
by newsin.ro, 10.12.2010


"Old car scrapping" program to run until January 31st, 2011
The voluntary vehicle retirement programme "Rabla'"("old car scrapping") will not be extended after January 31st, 2011, therefore people who still have vouchers need to hurry and use them, Environment Minister, Laszlo BORBELY, said on the 13th of December. "If they don't use them until January 31st, 2011, they will lose them", Realitatea.net informs.
The 2010 "Rabla" programme is addressed to both individuals and legal entities, giving the option of buying a new vehicle using up to three vouchers to cover part of the price. The value of a voucher is RON 3,800 and a maximum of three (RON 11,400) may be used for buying a new car. At the end of November, BORBELY said the intention was to implement a new "Rabla" programme in 2011 allowing four vouchers each worth RON 3,000 instead of three for scrapping old cars and three vouchers each worth RON 17,000 for scrapping old tractors. "The number of vouchers will be determined by how many vehicles will be retired. Currently, we allow the almost 17,000 voucher owners to use them until January 31st, 2011. The new programme will commence on February 1st, 2011. We are looking at giving four vouchers each worth RON 3,000 instead of three. A person will therefore be able to use a maximum of four vouchers worth RON 12,000 or approximately EUR 3,000. If they add another EUR 5,000 - 6,000 they will afford a new car", the Minister said then. According to the Ministry of Environment, over 180,000 old cars have been scrapped this year compared to 32,000 in 2009.
In respect of other environmental protection plans, Minister Laszlo BORBELY also stated that, in 2011, Romania would be supported by the European Union in the implementation of a CO2 sequestration project, according to Agerpres. The Romanian project worth over EUR 500 million for the development of a CO2 sequestration plant at half the normal price will be funded by Brussels. At the same time, the Environment Minister also announced that the plastic bottle (PET) reception systems to be implemented in major stores was an initiative on which the Government had not yet made a decision.
by nineoclock, 14.12.2010


Local businesspeople show more optimism about 2011
Romanian businesspeople expect a more favourable climate next year, shows a survey done by the European Association of Chambers of Commerce and Industry - Eurochambers. They are more optimistic about the trend of financial indicators in 2011, even if a majority of respondents from Romania report a dramatic fall of turnover in 2010 compared to 2009, with just one quarter registering growth. For 2011, 34.1 percent of companies expect a rise in turnover. In what regards sales on the local market, in 2010 only 19.2 percent of Romanian businesses reported growth, and 52.9 suffered a dramatic decrease.
Indicators for 2011 are well-balanced: 32.3 percent expect to sell more locally and 35.1 percent estimate smaller sales figures in Romania. In what regards the export, despite the positive trend registered in the second half of 2010 and foreseen in 2011, things were not any better. Some improvement is also anticipated with regard to the number of employees in Romania in 2011. In 2010, the number of employees grew for 15 percent of companies and dropped in the case of 42 percent. As for the business environment in 2011, 17.5 percent of Romanian entrepreneurs answered they enjoyed development-fostering conditions and 46 percent indicated an involution of business conditions. In Europe, the total 2010 turnover exceeded last year's expectations, with 40 percent of companies also expecting growth next year. Out of European countries with dominant economies, France registered the best score with a positive outlook. Greece is the only country that did not register a favourable forecast.
by nineoclock, 14.12.2010


Registration of new vehicles up over 26 pc in November
According to the Office for Driver Licenses and Vehicle Registration (DRPCIV), in November registrations of new vehicles grew by 26.7 percent to 13,304 units compared to the same month last year, while auto vehicle registrations climbed 34.7 percent to 11,440 units, Mediafax informs. In the first 11 months registrations of new vehicles dropped 21 percent to 82,069 units. At the same time, second-hand vehicle registrations grew by a spectacular 80 percent to 26,887 units in November compared to the same month last year. On the other hand, registrations of freight transportation auto vehicles dropped over 25 percent to 1,095 units. DACIA tops the best sold vehicles' standings with 4,105 units sold in November, 45 percent above the number sold in the same period last year.
by nineoclock, 14.12.2010


BNR gets RON 500 million from interbank market
On the 13th of December, 2010, BNR sterilised RON 500 million on the interbank market through a "depo-auction" facility with a week's maturity although the banks were willing to deposit a total of RON 6.04 billion with the central bank at an interest rate of 6.25 percent, equal to the key-interest rate. According to Mediafax, a total of 24 banks participated in the operation and the deposits attracted by BNR mature on December 20th. The sum raised represents 8.27 percent of the total applications and dealers say the operation had no visible impact on interbank interest rates.
by nineoclock, 14.12.2010

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