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XPRIMM News - The Romanian Insurance Market Newsletter
No. 174, March 10th, 2011
 
 
EDITORIAL | INTERVIEW | TOP PRESS | CEE, RUSSIA&CIS | FINANCIAL NEWS | EVENTS
EDITORIAL  

A positive… minus?

Recent estimates of the insurance market leaders regarding its evolution, be they optimistic or pessimistic, indicate a negative dynamic for the current year. Moreover, they are stating that in 2010 they were forced to react, almost constantly, only in the sense of minimizing undesirable effects.

What did actually happen? With a substantially diminished purchasing power, customers had to choose between giving up insurance and “betting” on cheaper ones. Meanwhile, with increasing claims, the insurers had to choose between commercial underwriting and losing customers.

To these harsh conditions, another two things came up: the decrease of the motor market and… a "gift" of the Romanian state, the VAT increase to 24%, which have also amplified the negative impact.

However, the market potential remains the single and most important positive aspect of insurance. The potential of this market has brought here important international groups. The same potential makes the shareholders support with capital the activity of the companies in the market.

This contribution indicates that, at a certain moment, all these investments will be recovered. In short, shareholders are forced to be optimistic. And, if investors in the market are optimistic, why should't we be the same?

alex.rosca@mxp.ro

Credit Europe Asigurari
INTERVIEW  
I believe the main challenge this industry has to face this year is directly linked to each manager's ability to manage the third year of crisis. Perhaps this will sound strange, but the crisis has its clearly defined role - having a cyclic character, it makes innovation, determination and adapting to other unconventional strategies be the arguments for insurance companies managers and for financial mediations brokers, in order to find the optimal solution to relaunch their activities.

Cristian BALANICA
General Manager, PIRAEUS Insurance Broker

XPRIMM: What are the main challenges that the insurance brokerage market has to face in 2011? How has the perception of clients regarding the insurance consultant's role changed over last year?
Cristian BALANICA:
I believe the main challenge this industry has to face this year is directly linked to each manager's ability to manage the third year of crisis. Perhaps this will sound strange, but the crisis has its clearly defined role - having a cyclic character, it makes innovation, determination and adapting to other unconventional strategies be the arguments for insurance companies managers and for financial mediations brokers, in order to find the optimal solution to relaunch their activities. This economic situation has "worked" more in favor of insurance brokers - I say this because, in the past two years, on this market, a greater need for consultancy than in previous years could be noticed, customers have adjusted their insurance budgets in accordance with the requirements of the economic environment and then, they needed that support only a broker can provide.

More

TOP PRESS  
ECJ prohibits pricing depending on the gender of the insured after December 21, 2012. European insurance industry is disappointed by the decision and expects rates increases for motor and life insurance for women
by andreea.ionete@mxp.ro
European Court of Justice gave, on March the 1st, its verdict regarding gender discrimination in pricing insurance matters. Thus, ECJ said that after December 21st, 2012, insurance companies will be prohibited from setting prices for insurance products based on a risk assessment founded on statistical differences according to gender.
CEA, Federation of European Insurers and Reinsurers, also said, in the same day, that it was "disappointed" by the ECJ decision, which stipulates that insurance companies in Europe will not be allowed to use actuarial and statistical factors based on sex in risk assessment and setting the premiums levels for the insured.

14% increase on MTPL in 2010. Motor Hull decreases by 25%
by mihai.cracea@mxp.ro
"MTPL insurance has registered an increase of underwritings of 14%, from RON 2.15 billion in 2009 to RON 2.46 billion in 2010. Also, the number of issued insurance policies increased by 7% in 2010, reaching 6.52 million", said Angela TONCESCU, President of the Insurance Supervisory Commission.
Motor Hull insurance, amid decreasing auto leasing sales, fell 25% from 2009, to RON 2.49 billion last year.

The business of ASTRA Asigurari increased by 37% in 2010, surpassing the threshold of RON 1 billion
by andreea.ionete@mxp.ro
ASTRA Asigurari, the leader of the Romanian profile market, ended 2010 with a volume of underwritings of RON 1.11 billion, up 37% compared to 2009, according to preliminary results, in line with the target set by the company for last year, of RON 1.16 billion. Also, ASTRA Asigurari recorded a net accounting profit of RON 21.5 million, 3.5 times higher than that achieved in 2009, of RON 6.2 million, thus managing to reach nearly double the target profit set for 2010.
Of the total underwritings, RON 1.09 billion represents the volume of gross written premiums of general insurance segment, up 37% compared to 2009.

ALLIANZ-TIRIAC business fell 20% in 2010. The 2011 target is portfolio and market position strengthening, with focus on profitability
by andreea.ionete@mxp.ro
ALLIANZ-TIRIAC Asigurari ended 2010 with total revenues from underwritings of RON 1.03 billion, down by about 20% compared to the previous year, when the company recorded business of RON 1.29 billion. Regarding the operational results, the company remained in positive territory, with the value of RON 8 million, according to preliminary annual figures in accordance with International Accounting Standards. The level of profitability, located in 2009 at RON 46 million, was negatively influenced mainly from two directions: increase of VAT and further increase of the payment obligations for body injuries covered by MTPL policies, according to General Manager of ALLIANZ-TIRIAC Asigurari, Rangam BIR.

Mihail TECAU: The target for 2011 is to maintain customers
by andreea.ionete@mxp.ro
"In 2010, we had to reorganize, because we were accustomed to years of steady growth and now we had to adapt to new customer budgets", said Mihail TECAU, President of the Directorate, BCR Asigurari VIG, during the seminar organized recently by ISC. Also, he added, "the most important target for 2011 is to maintain our customers and to do important things, with less investments".
"The position of BCR Asigurari remained the same in the market in 2010 and we tried to come up with innovative products to meet our clients needs. Since consumer needs have remained constant in 2010, this led to a price maintenance, as the main element used in the competition between insurers. The strategy for 2010 has started from a better price and a bonus system. But not only the price was important. A prudential management requires to take into account the impact of the price over the portfolio, because we can not afford to stop having profit", underlined Mihail TECAU.

BCR Life VIG: The 2010 increase of life insurance creates the premises for evolution in 2011
by alex.rosca@mxp.ro
Moderate growth of the life insurance market registered last year proves that hard times for the field, culminating with the results recorded in 2009, have passed, and the figures of 2010 indicate an optimistic potential for this year. "We must keep in mind that all the achievements of 2010 will bring benefits for the year 2011", said Florina VIZINTEANU, President of the Directorate, BCR Asigurari de Viata, in the seminar organized by ISC on the 24th of January.
"We have an increase of 2.3% in 2010, a good increase considering that, from all estimates, we are situated above the economic growth, above the evolution of GDP, which only gives the certitude that life insurance industry has recovered in 2010, after a difficult 2009, and we have all premises that 2011 will bring increases for this field. However, this year's increase can be between 3-5%, being influenced by the evolution of the economic environment", Florina VIZINTEANU continued.

Radu MUSTATEA: We anticipate a 20% decline of the average premium on MTPL in 2011, and the effect will be seen in the financial results of the market
by andreea.ionete@mxp.ro
"ASTRA Asigurari became market leader in 2010, enjoying some favorable circumstances. Thus, 2010 was marked by fundamental changes, especially regarding motor insurance: electronic issuance of policies, attitude and technology changes etc. The fact that we have been prepared in time for all these changes, as well as that fact that we adjusted our offer to the current needs of the clients were the main advantages that we have had last year", stated Radu MUSTATEA, President of the Directorate, ASTRA Asigurari.
Looking at the big picture, the company leader added, "everything that happened in the insurance market in 2010 was also drawn by the economic situation in which we operated, all these negative evolutions going to contribute to an unfavorable result in 2011. We anticipate a dramatic decrease, of 20%, of the average MTPL premium, which, under the circumstances of the average claim increase, will affect the market, and this will be seen in the financial results".

VIDEO: Rangam BIR: 50% of customers who did not renew their Motor Hull policies have given up voluntary insurance definitively
by mihai.cracea@mxp.ro
"Almost 50% of our customers who did not renew their Motor Hull policies have not at all renewed their policies, thus coming out of the system of voluntary insurance. Therefore, we must ensure that these customers maintain a form of coverage. This goal can be achieved by adjusting existing premiums and by the development of new products", said Rangam BIR, CEO, ALLIANZ-TIRIAC.

Brokers were able to compensate the decrease of the Motor Hull portfolio generated by leasing
by andreea.ionete@mxp.ro
"It is true that in 2010 things did not go too well on leasing and bank loan segments, but for this year we anticipate a revival of the leasing. We have managed to maintain the same level of business, compensating the decrease of the two segments through partnerships with brokers. This was the only solution for development and independent brokers", said Radu MANOLIU, Deputy General Manager, CREDIT EUROPE Asigurari.
EUROTAXGlass's launches Car Clasification System
by mihai.cracea@mxp.ro
"The product provides a technical link between the insured good and the insured risk. The result is an active risk management and the possibility to reduce claims costs. The market has understood that and has begun to segment. We will be able to estimate, from the moment of concluding the policy, the possible car repair costs", explained Sorin IACOB, General Manager, EUROTAXGlass's Romania.
The other insurance classes can not replace the underwritings of the motor segment
by mihai.cracea@mxp.ro
The 25% underwritings decline of last year on the Motor Hull segment has lead to an end of 2010 filled with many promotional offers and more aggressive pricing policies of the players in the market, even under the circumstances in which motor insurance is responsible for the growing losses from last year, at insurance industry level.
PLATINUM business went up by 47%, reaching EUR 4 million
by vlad.boldijar@mxp.ro
2010 was a good year for PLATINUM insurance company, financially speaking, with a total gross written premium's volume of RON 16.4 million, the equivalent of about EUR 3.9 million, representing an upward evolution of 46.7% in European currency, when reported to 2009.
Business of EUR 47 million for MARSH Romania, 1% up year-on-year
by vlad.boldijar@mxp.ro
EUR 47 million (RON 197.8 million) is the value of the premiums mediated by MARSH Romania in 2010, according to INSURANCE Profile estimates, the figure representing an increase of 1% compared to January-December 2009.
Mediations of EUR 15 million for SAFETY Broker in 2010
by mihai.cracea@mxp.ro
SAFETY Broker ended 2010 with a total volume of mediations of EUR 15 million, up 70% from 2009. The main driver of growth was the development of the retail segment, which experienced a 60% increase.
Underwritings of EUR 15 million for CITY Insurance in 2010
by vlad.boldijar@mxp.ro
CITY Insurance revenues from gross written premiums have reached, in 2010, the value of EUR 15 million (RON 63.2 million), which represents, compared with 2009, a nominal increase in European currency of about 123%.
OMNIASIG and PILKINGTON opened the first quick repair shop
by oana.radu@mxp.ro
On the 28th of February 2011, OMNIASIG Vienna Insurance Group, together with its partner, PILKINGTON - Windscreen-center, inaugurated, officially, the working point PILKINGTON Bucuresti-Grivitei, located inside the OMNIASIG Claims Center, Grivita Street, No. 355-357.
ATE Insurance launched a money insurance product for non-banking companies
by andreea.ionete@mxp.ro
ATE Insurance Romania has recently launched a specialized money insurance product, addressed to companies that are not engaged in banking activities.
HIZIR International aims to expand its services in Romania in 2011
by oleg.doronceanu@mxp.ro
HIZIR International, one of the regional leaders in providing private healthcare services, intends to develop its business in Romania, in the context of its strategy of expanding its operations in Eastern Europe.
CEE, RUSSIA&CIS  
Underwritings of USD 1 billion for the Kazakhstan insurers in 2010
by oleg.doronceanu@mxp.ro
Insurance companies in Kazakhstan registered last year a volume of gross written premiums worth around USD 1 billion, up 24% compared with the previous year, said Alina ALDAMBERGEN, Vice President, Insurance Supervisory Agency of Kazakhstan, in opening of the International Conference "Insurance in Central Asia", that took place on the 3rd and 4th of March, 2011, in Alma-Ata. This evolution comes after two consecutive years of decline, of 9% in 2008 and of 15% in 2009, according to official data.
"Insurance goes in tandem with the evolution of the national economy. In 2010, GDP grew by 7% and inflation dropped to 8% level", said the quoted official. In this context, 2010 is characterized by the evolution of underwriting, increased capitalization of companies and financial stability. Thus, the insurance segment registers the most significant growth in the financial market, the assets of the profile companies reaching 3% of the total.

EUR 19.52 million underwritings for Russian insurers in the first nine months of 2010
by olesea.serghiescu@mxp.ro
Russian insurers have underwritten, in the first nine months of last year, gross premiums amounting to EUR 19.52 billion, up by 7.2% compared to the same period in 2009, and recorded claims of EUR 13.99 billion, an evolution of 4.3%.
On insurance classes, the voluntary segment underwritings reached EUR 8.7 billion, a 7.4% increase compared to the correspondent period from 2009. Meanwhile, the volume of claims paid on this segment amounted to EUR 4.1 billion, insignificantly lower compared to 2009.

In 2010, Hungarian insurers business remained at the 2009 level
by olesea.serghiescu@mxp.ro
The volume of gross premiums underwritten by the profile companies in Hungary has increased by only 1.6% in 2010, reaching about EUR 3 billion. "The evolution can be compared with the level of inflation of last year", said Zoltan PAAL, Vice President of the Insurers Association in Hungary, about these results.
2010 brought a EUR 54.9 million decline for the general insurance segment, reaching EUR 1.46 billion.

ALLIANZ's underwritings in CEE maintained at EUR 3.7 billion in 2010
by mihai.cracea@mxp.ro
ALLIANZ's total written premiums in Central and Eastern Europe reached EUR 3.7 billion, remaining at the same level as in 2009. The operational profit for 2010 is worth EUR 119 million, a value that outlines the 61% decrease.
Profit down 57% for CROATIA Osiguranje
by vlad.boldijar@mxp.ro
Croatian insurance group CROATIA Osiguranje recorded last year a net profit of KN 88.75 million (EUR 12 million), 57% less than in 2009, when the same indicator was pointing KN 155.61 million (EUR 21 million), according to preliminary financial reports published by the Zagreb Stock Exchange.
FINANCIAL NEWS  
Romanian businessmen call for public debate on new IMF deal
by www.nineoclock.ro
Before Romania signs a precautionary agreement with the IMF, the manner in which money circulate between the National Bank of Romania's reserve and the public budget should be clarified first, Florin POGONARU, President of the Businessmen's Association of Romania (AOAR), stated for HotNews.ro's and Radio Deutsche Welle's "Bucharest Punkt Bonn" show.
Industrial output up 11.9 pc year-on-year in January
by www.nineoclock.ro
Industrial production fell 3.7 percent in January from December 2010, yet rose 11.9 percent from January a year ago, according to data supplied by the National Institute of Statistics (INS). Industrial output according to the number of working days and the season increased 1.0 percent compared to December 2010 and 10.6 percent from January the same year.
Brazi plant could hike OMV PETROM profit by EUR 100 million
by www.nineoclock.ro
According to the JEFFERIES & Co investment bank's analysts, OMV PETROM's EBIT profit could grow by up to EUR 100 million after the natural gas-burning power plant in Brazi becomes operational, Mediafax informs quoting Bloomberg. PETROM plans to create a portfolio of electricity production assets that would include the 860-MW power plant in Brazi and a wind farm in Dobrogea.
Subway to have 3 new main lines by 2020
by www.nineoclock.ro
Gheorghe UDRISTE, General Manager, METROREX, claims that the Bucharest subway will have three new main lines with 69 stations by 2020. "For all three new main lines that will be built and gradually put into use by 2020 we need approximately EUR 6.5 billion, funds that will come from the European Investment Bank, Bank of Japan and the Romanian Government".
Expressway, for consideration by Chinese investors
by www.nineoclock.ro
A Chinese delegation is expected in Bucharest in the following days to set a work calendar for several projects, one of which refers to the suspended motorway, to be designated as an expressway, the Mayor of Bucharest, Sorin OPRESCU, stated on the 9th of March, Mediafax reports.
 
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, Mihai CRACEA, Andreea STATE
Junior Editor: Dora ALECU, Olesea SERGHIESCU

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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EVENTS
International Reinsurance Conference - 15th Edition
March 24th-25th, 2011
Moscow, Russia
Organizer: ARIA
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For details: www.re-conference.ru
International Insurance Mediation Conference - 1st Edition
March 28th-29th, 2011
Istanbul, Turkey, HYATT Hotel
Organizer: Media XPRIMM and Istanbul Underwriting Center
With the Official Support of: UNSICAR
With the Support of: SAIPRO and INSMARKET
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VII International Risk Management Conference
April 14th-15th, 2011
Alma-Ata, Kazakstan
Organizer: EURASIA Insurance Company
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For details: www.IRMC.kz
Tashkent International Insurance Forum
April 14th-17th, 2011
Tashkent, SAIPRO
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Official web-page: www.tiif.uz
II Central European L&H Leadership Forum
May 17th-18th, 2011
Vienna, Austria
Organizer: Russian POLIS Information Group
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For details: www.in-sure.ru
FIAR - International Insurance-Reinsurance Forum
May 23rd-26th 2011
Sinaia, Romania
14th Edition
Organizer: Media XPRIMM
Official web-page: www.fiar.ro
3rd CEA International Insurance Conference - "Insurance reform: opportunity or threat?"
June 16th, 2011
Divani Apollon Palace & Spa, Vouliagmeni, Athens, Greece
Organizer: CEA - Comite Europeen des Assurances
For details: conference.cea.eu
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