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	XPRIMM News - THE ROMANIAN INSURANCE MARKET NEWSLETTER No. 145, November 26th, 2009 Click here to subscribe! Click here to unsubscribe!
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EDITORIAL

Communication crisis or Crisis communication?

We started, on July 1, 2009, the largest program of communication of the insurance industry ever developed in Romania. Target: the final clients area, to inform and to educate the large public, the consumers and the potential consumers of insurance services.

This is the context in which www.constatulamiabil.ro - a web-portal dedicated to the amicable report procedure was launched on 1st of July. They believed in us from the start: ASTRA Asigurari, later joined by CARPATICA Asig, GROUPAMA and SAFETY Broker. Since its launch, the site had over 82,500 visitors.

Later on, on September 1, www.asigurarealocuintelor.ro was launched. The site incorporates de-codified information on voluntary household insurance, also pointing out the coordinates of the future mandatory health insurance system. We were supported by UNIQA, ASTRA Asigurari and GENERALI, and then by CREDIT EUROPE Asigurari and SAFETY Broker. The web-portal has been visited untill now by more than 27,000 times.

Of course, an important support also came from those who have multiplied the campaign's message: TVR, RFI, Wall-street.ro, Conso.ro and many others.
On December 1, 2009, we will launch another challenge: the first web-site dedicated exclusively to motor insurance.
Beyond the purely informational zone, the portal is built around an unique application in Romania, which will explain to the insured, whether they are the ones that suffered damages or the ones responsible for the accidents, what they have to do in case of claims, how the bonus-malus system works and what are the consequences of their actions.

But all will come in due time...

by alexandru.ciuncan@mxp.ro

Insurance PROFILE Review

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INTERVIEW

Interview with Karina ROSU,
Chief Executive Officer,
AON Romania

XPRIMM: How were the Romanian insurance brokerage market and, implicitly, the results of your company affected by the financial crisis? Which are the insurance classes that have suffered the greatest depreciation?
Karina ROSU: The insurance broker exists because his clients need his experience on risk and insurance matters. The financial crisis has added new accents to the risk profile of the companies we work for. So, we are asked to find answers to these and to offer solutions for the new situations our clients find themselves in.
With the advantage of being part of a financial group with global presence, we also benefit from the experience of our colleagues from other countries, who propose new products (e.g. products that offer protection in case in which one or more of the insurers involved in the insurance program of a customer enter insolvency or are downgraded below a certain level by rating agencies, this policies "fill" the capacity left uncovered). Since the beginning of the dramatic series of events, a year ago, AON has made an exceptional exercise of communication and leadership, making available to its employees and interested customers information and analysis of cases relevant for the stability of the insurance sector, through press releases done and broadcasted in real time by a crisis cell ("AON situation room"). With a portfolio with clients that are integrated in the international insurance programs of the mother companies, we have uesd this information in our relationships with customers anywhere in Romania it was needed, and our brokers knew at any time to react with calm and confidence to the situations they faced.
The reduction of activity in several areas is evident, reflected by the postponement or the cancellation of some projects in the real estate sector, of some industrial investments, by the limiting or the decreasing of the insured sums for finished goods and transported goods, by restricting the volumes of transactions based on credit, both to equipments and to vehicles/auto fleets, by less interest among employers in terms of employee benefits products.

XPRIMM: How do you consider the brokerage market will evolve by year's end? How about in 2010?
K.R.: I believe the share of the brokerage activity in the total insurance market will increase in 2010, even if the market volume shrinks due to the reduction of commercial and industrial activity in the economy. We are already noticing a growing interest for insurance products such as professional liability.

XPRIMM: What were the consequences of limiting to 15% the commission for MTPL policies and how did this measure affect the profitability of the brokers' activity?
K.R.: Our portfolio is not "controlled" by MTPL policies, we are handling this type of policies as a service that our clients need, for whom we also have other insurance programs. Therefore, our response would not be relevant.

XPRIMM: What is the most acute problem of the profile market, as you see it, for the next period of time? What are the solutions for the development of the brokerage market in times of crisis?
K.R.: We are going through moments of reduced speed in the motor insurance sector, that could create a strategic advantage for the insurers who aim to achieve balanced portfolios and to offer quality claims services in all areas.
The solutions for developing the brokerage market in times of crisis lie in the brokers' capacity to adapt to the clients' needs and in intensifying the efforts for providing high standard services. We focus on these coordinates in the projects we deal with.

XPRIMM: How will the percentage of brokers mediations 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?
K.R.: The insurance market reacts with a certain delay to the movements in the economy, so the reduction of the rate of growth has not yet reached the minimum point, to my belief.
However, I think the brokerage market share will tend to return to 30% very soon, perhaps even in the first half of 2010.

XPRIMM: Which are the insurance classes targeted on medium term by insurance brokers? How did the crisis influence the people's perception about insurance?
Which insurance classes have development potential for the next period?
K.R.: We are interested in all insurance classes relevant for trade, industry, agriculture, investments, human resources.
We have been involved in a project with great impact for the market and for consumers: to participate in the organization and the buying of the reinsurance program for the catastrophe insurance pool, which will become operational in 2010. I think this program has a great potential to revive the public perception regarding insurance and it can be a positive impetus for insurers.
I can confirm that, at customers' level, the interest to understand the effects of some exposures they are facing has increased and they are more aware than before of the quality and stability of insurers.

XPRIMM: What are the expected results of the company you represent by the end of this year, in comparison with the previous year?
K.R.: Moderate growth, with an eye on costs.

by andreea.ionete@mxp.ro

Karina ROSU,
Chief Executive Officer,
AON Romania

TOP PRESS

ISC: Claims increased by 38% and underwritings stagnated in the first nine months
Romanian insurers have ended the first nine months of this year with underwritings of RON 6.7 billion, stagnating at the level of the similar period of 2008, with a variation of less than 0.1% in nominal terms. However, the value of claims paid by profile companies increased by 38.6%, to over RON 4.4 billion, said, on November 18, the ISC President, Angela TONCESCU.
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by andreea.ionete@mxp.ro, 18.11.2009

Changes in Top 5 non-life at 9 months
On the general insurance segment, the companies in Top 5 have underwrote premiums over EUR 805 million, a nominal decrease, in European currency, of 14.7%, compared with the first three quarters of 2008. Compared to the six months situation, the top has suffered a change in the fourth position, where GROUPAMA Asigurari entered, taking the place of ASIROM, that fell on the 6th place, according to the estimations of the Review INSURANCE Profile.
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by andreea.ionete@mxp.ro, 23.11.2009

Top 5 Life Insurance - Q3/2009: BCR Asigurari de Viata climbs on the second position
According to the Specialty Review Insurance PROFILE, four of the top five insurance companies that activate on the life segment recorded in the first nine months of this year negative evolutions, the only exception being BCR Asigurari de Viata, with underwritings of RON 168.4 million, which is, compared with Q3/2008, a nominal evolution in national currency of 40%.
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by vlad.boldijar@mxp.ro, 24.11.2009

MTPL, 3Q/2009: Premiums increase by 15% and claims by 33%
In the first nine months of this year, the MTPL segment remained one of the most important ones for the insurance market in Romania, as underwritings went up by 15%, to RON 1.6 billion, in the same time with an increase of 33% of the amount of paid claims, up to RON 1.1 billion. The average premium increased by 15% compared to the equivalent period of 2008, in the same period, according to ISC data.
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by andreea.ionete@mxp.ro, 20.11.2009

Bonus-Malus will advantage 90% of the MTPL insured drivers
The introduction of the bonus-malus system, starting January 1, 2010, for the MTPL policies, will be an advantage for 90% of the insured, in the context in which only 10% of those who have an MTPL policy are causing claims, announced the Insurance Supervisory Commission. Thus, a driver who had no accidents over a period of one year may receive a bonus of 10%, and the reduction can even reach 50% in 7 years, in the absence of any road events. At the same time, for the drivers with claims, insurers will apply a malus coefficient of 45% for one road event, and an increase of up to 200% for those who produce more accidents.
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by andreea.ionete@mxp.ro, 18.11.2009

Exchange rate and growth of claims rate - factors leading to increased MTPL rates
"The price of the MTPL policies is decisively influenced both by the exchange rate and by the the increasing claims rate, which has doubled, reaching 10-12%", Radu MUSTATEA, President of the Directorate of ASTRA Asigurari, has recently declared.
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by oana.radu@mxp.ro, 18.11.2009

Frans Van der ENT: We are interested in possible acquisitions
The EUREKO group, present on the Romanian profile market through EUREKO Asigurari, is interested in a possible acquisition in our country.
"We are eyeing the possibilities of making an acquisition of a company, but also of taking-over some portfolios", Frans Van der ENT, Country Manager of EUREKO in Romania, has declared for XPRIMM Newsletters.
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by mihaela.circu@mxp.ro, 16.11.2009

The OMNIASIG profit increased by 18.6% in the first nine months
OMNIASIG Vienna Insurance Group acquired, during the first nine months, a gross profit of over RON 41 million, 18.6% more than at the end of September last year, although business has declined. Thus, the company ended the first three quarters of 2009 with a volume of underwritings of almost RON 858 million, less by 6.6% compared to RON 919 million, registered in the corresponding period of last year.
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by andreea.ionete@mxp.ro, 17.11.2009

The profit of BCR Asigurari de Viata increased by 82% in nine months
BCR Asigurari de Viata VIENNA Insurance Group has ended the first nine months of the year with an increase of 82% of the gross profit, compared to the same period in 2008, up to RON 12.5 million. Also, underwritings of the company advanced with over 40%, in nominal terms, up to RON 168.4 million.
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by andreea.ionete@mxp.ro, 24.11.2009

Romania: a market waiting for the favorable moment to valorize its potential
Among the insurance markets in Central and Eastern Europe, Romania ranks 5th as volume of gross written premiums, after Poland, Czech Republic, Hungary, Slovenia. In the non-life insurance segment, our country manages to climb the third step of the podium, after Poland and the Czech Republic. Furthermore, Romania is present with 3 companies in the first 20 positions of the top of the non-life insurers in the region: ALLIANZ-TIRIAC (13th place), OMNIASIG (15th place) and ASTRA (20th). In Top 100 non-life, the number of Romanian presences is 14. On the life insurance segment, ING Asigurari de Viata ranks 27th, while in Top 100 Romania is present with 9 companies.
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by daniela.ghetu@mxp.ro, 12.11.2009

Romania - 5th place in the top of economic losses caused by road accidents
Romania ranks 5th in terms of economic losses suffered as a result of road accidents, according to a report of the World Bank for Europe and Central Asia. Thus, the economic cost of accidents on the roads in Romania amounts to EUR 4.1 billion.
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by mihai.cracea@mxp.ro, 26.11.2009

Business of over RON 245 million for ARDAF
The insurance company ARDAF underwrote, in the first nine months of this year, a volume of premiums of RON 245.24 million, according to the report submitted to the Bucharest Stock Exchange. At the same time, the insurer paid claims amounting to RON 186.67 million.
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by mihaela.circu@mxp.ro, 17.11.2009

Motor Hull insurance led to an increase of over 200% of the underwritings of CERTASIG
CERTASIG underwrote, in the first three quarters of this year, gross premiums that amounted to EUR 6.28 million, which, compared with January-September 2008, represents an increase in absolute value of EUR 4.25 million (editor's note: in Q3/2008, the value of CERTASIG's underwritings amounted to EUR 2.03 million).
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by vlad.boldijar@mxp.ro, 20.11.2009

Capital increase of RON 33.5 million in OTP Garancia Asigurari
GROUPAMA decided to increase the capital of OTP Garancia Asigurari with RON 33.5 million, by issuing 335,000 new shares, with a nominal value of RON 100, according to a report of the CSSPP. Thus, the capitalization of the company grew by 40%, to RON 118.34 million.
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by andreea.ionete@mxp.ro, 17.11.2009

CITY Insurance entered the MTPL market
The insurance company CITY Insurance received, by the ISC Decision No. 829, of November 10, current year, the authorization to practice mandatory motor third party liability insurance.
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by andreea.ionete@mxp.ro, 25.11.2009

CEE, RUSSIA&CIS

V International Congress "World Views for Life Insurance in Eastern Europe, CIS, and Asia" took place in Moscow
On November 17-18, Moscow-based hotel BALTSCHUK Kempinski hosted V International Congress "World Views for Life Insurance in Eastern Europe, CIS, and Asia", organized by RUSSIAN Polis Information Group. The forum was supported by Gold Sponsors SCOR Global Life and HANNOVER Life Re, Silver Sponsors PARTNER Re and FADATA and Sponsor SWISS Re. The VIP dinner was organized with the support of insurance company ROSSIA. PRIMM Insurance & Pensions Magazine was a traditional Media Partner of the event.
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by RUSSIAN Polis Information Group, 23.11.2009

AXA: Crisis stimulates the development of Life&Pensions insurance in CEE
The recession has created opportunities in the life and pensions segment in the CEE countries, as clients are now more interested in security of their savings, stated Cyrille De MONTGOLFIER, CEO AXA CEE, at the Vth International Congress "World Views for Life Insurance in Eastern Europe, CIS and Asia", organized recently in Moscow by the RUSSIAN Polis Information Group. He also believes that despite the current economic downturn, long term insurance market growth of all CEE countries is expected to remain significantly higher than in Western Europe.
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by oleg.doronceanu@mxp.ro, 24.11.2009

Life insurance in Hungary, down by 21,3% in the first nine months
Hungarian insurance companies specialized on the life insurance market have underwrote EUR 1 billion in premiums in the first nine months of 2009, a decrease by 21,3% in comparison to the same period of the last year. Thus, "financial market turmoil significantly reduced demand of life products in 2008 and the recessionary pressure on household income will further reduce this demand throughout 2009", stated Csaba VARGA, General Director of the Hungarian Supervisory Authority at the Vth International Congress "World Views for Life Insurance in Eastern Europe, CIS, and Asia", organized recently in Moscow by the RUSSIAN Polis Information Group.
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by oleg.doronceanu@mxp.ro, 24.11.2009

Decrease on the Croatian insurance market is coming to its end
Total gross premiums charged by Croatia's 27 insurance companies at the end of October this year amounted to approximately EUR 1,1 billion, which is 2.5 percent less compared with the first ten months last year, according to limun.hr.
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by andreea.ionete@mxp.ro, 20.11.2009

Ukrainian "watchdog" cancels requirements for nonresidents' reinsurance rating
Ukrainian State Commission for Regulation of Financial Services has recently canceled the decision adopted earlier, that obliged the non-resident insurance/reinsurance companies to hold an international credit rating assigned by A.M. BEST, MOODY's, STANDARD & POOR's or FITCH in order to conclude a contract with a local company.
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by oleg.doronceanu@mxp.ro, 23.11.2009

TRIGLAV increases profit
In the first nine months of this year, the leader of Slovenian insurance market, Zavarovalnica TRIGLAV, posted EUR 28 million in net profit and EUR 34.9 million in pre-tax profit. It is worth noting that the company posted EUR 30 million in pre-tax profit in the respective period last year. TRIGLAV acquired EUR 583.4 million in gross premiums in the same period.
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by www.finance.si, 19.11.2009

Bulgarian insurers reduced motor third-party losses
Bulgaria's insurance sector ended the first nine months of the year in the black, as losses from the mandatory motor third-party liability policies shrank drastically from August, showed the latest figures of the Financial Supervision Commission (FSC).
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by DNEVNIK, 19.11.2009

FINANCIAL NEWS

The leasing market from Romania - estimated at EUR 1.5 billion
The Romanian leasing market will reach next year, at best, the level registered in 2009, estimated at maximum EUR 1.5 billion, but it may also be below this threshold, due to the economic evolution, the representatives of the relevant companies estimate, MEDIAFAX informs. "This year, the leasing market could reach maximum EUR 1.5 billion at best, and for 2010 it would be a performance to remain at the level from 2009, but it could be also lower. We don't know exactly what will happen, because there are many unknowns", Dan CONSTANTINESCU, Executive Manager for sales UNICREDIT Leasing Corporation, stated.
The Association of Financial Companies - ALB Romania estimates that the market will total EUR 1.25 billion this year, down 74 percent vs. 2008.
by nineoclock.ro, 24.11.2009

IT to grow share in GDP in 2010
A recent survey done by the IDC consulting company shows IT expenditures on the local market will be RON 5.47 billion, down 19.2 percent compared to 2008, and the IT contribution to the gross domestic product will drop by 0.2 percent, to 1.1 percent in 2009.
According to the IDC study, the share of IT expenditures in the Romanian GDP will rise to 1.3 percent in 2010, to 1.5 percent in 2011 and to 1.6 percent in 2012-2013. IT-related activities will generate about RON 1.1 billion in taxes contributed to the budget in 2009, and nearly RON 6 billion in the next four years up to 2013.
The development of the IT market will create 21,000 new jobs from 2010 to 2013, starting from a basis of 44,000 jobs in 2009.
The IDC analysis showed that the software sector makes a substantial contribution to the generation of work in IT services and distribution, as well as in those organizations using IT in their work, meaning that, while software licensing expenditures will only be 15 percent of the total IT expenditure in 2009, 60 percent of the IT workforce will be operating in software-related activities.
IDC foresees an average annual rise in IT expenditures of seven percent in Romania from, 2008 to 2013, and of RON 9.51 billion by the end of 2013. The hardware sector will experience the lowest annual expenditure growth rate in the period from 2008 to 2013 - 4.2 percent, IT services will grow by 14.2 percent and software expenditures by 10.6 percent. At the end of 2013, the hardware segment will hold the largest share in the total IT expenditure and will amount to RON 5.89 billion, plus the software part - RON 1.29 billion and IT services - RON 2.32 billion.
by nineoclock.ro, 24.11.2009

MPF sells bonds worth RON 276 million
The Ministry of Public Finances (MPF) sold yesterday bonds with a one-year maturity worth RON 276.3 million, a little over a quarter of the planned value of RON 1 billion, a press communique informs. Moreover, the average yield stood at 10 percent per year for the seventh consecutive session. The maximum yield accepted was equal to the average yield of 10 percent, with the total value of the commercial banks' demand for bonds standing at RON 1.57 billion. The most recent tender for the sale of bonds with a one-year maturity took place on November 9, when the Finances sold bonds worth RON 104.3 million, representing less than 10 percent of the planned value.
Starting on October 19, the Finance Ministry rejected all the offers for yields higher than 10 per cent, that being the average cost that the Treasury paid in the last seven tenders. During this interval, the Finances rejected twice all of the banks' offers. Monday's tender was the last tender that the Treasury organized for the selling of RON-denominated bonds in order to refinance the public debt and to finance the state budget deficit. The Treasury thus managed to borrow RON 1.72 billion in November by selling bonds, with the value being significantly below the planned value of RON 6 billion and also below the sum borrowed in October (RON 2.53 billion).
by nineoclock.ro, 24.11.2009

ACEA: DACIA's European sales - up 19% in October
DACIA's auto sales in Europe totaled 20,753 units in October 2009, up 19 percent compared to the same month last year (17,442), with the local automaker's market share climbing from 1.5 to 1.6 percent, the statistics published yesterday by the European Automobile Manufacturers' Association (ACEA) show, AGERPRES informs.
In the first ten months of 2009, a total of 194,824 DACIA cars have been sold in 27 European states, up 28.6 percent compared to the same period last year, when the sales totaled 156,467 units. The HYUNDAI brand sales climbed 24 percent to a total of 287,000 units sold. ALFA ROMEO registered the third largest growth (9.5 percent to 95,000 units). VOLKSWAGEN and FIAT registered growths that surpassed 3 percent on an overall market that is still dropping following the disastrous results registered early this year, HotNews informs. Overall, the RENAULT Group's sales on the 27 markets totaled 1.094 million units in the first 10 months of 2009, down by 2.7 percent compared to the same period last year, when it sold 1.12 million units, AGERPRES informs.
On the other hand, the sales of new cars in Romania have dropped in November 2009 by 69 percent compared to the same month last year and totaled 7,572 units, in contrast to 24,474 units sold in October last year, the ACEA statistics published on Monday show. A total of 96,176 new vehicles were sold on the Romanian market, down by 62 percent compared to the same period last year.
by nineoclock.ro, 24.11.2009

EVENTS

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

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

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